West Coast Main Line row: Should railways be renationalised?

 
A Virgin train passes along the West Coast Main Line route near Abington on 29 August Should Britain's railways be returned to public ownership?

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The collapse of the West Coast Main Line bidding process, after the government found significant flaws, has once again sparked calls in some quarters to renationalise Britain's railways - 17 years after they were privatised.

FirstGroup had been due to take over the running of the line from current operator Virgin Trains in December, but now the competition will have to be re-run after the government scrapped its decision on the franchise.

Here two transport experts argue the case for and against.

AGAINST: Dr Richard Wellings, head of transport, Institute of Economic Affairs

In many ways the railways have been successful over the last 15 years, with significant growth in passenger numbers and freight. Several routes have been upgraded, ageing trains have been replaced and safety has continued to improve.

Dr Richard Wellings, head of transport, Institute of Economic Affairs Dr Richard Wellings says changes are needed but a private rail industry is still the way forward

Taxpayer subsidies have, however, reached unacceptable levels, at around £5bn a year. And costs are much higher than on comparable networks abroad.

In reality, the railways were not privatised properly. Politicians and officials retained tight control. As the current West Coast debacle shows, the government decides who runs the trains. It also decides levels of service, controls prices and determines the priorities for investment.

This is not genuine privatisation. Rail firms are essentially subcontractors for the state. And the high costs of the railways flow directly from these high levels of government involvement.

In particular, the government has imposed a complex artificial structure on the industry. The railways are suffocated by unnecessary bureaucracy. Highly paid lawyers, accountants, consultants and civil servants have benefited at the expense of taxpayers and passengers.

A further shift toward nationalisation would only make this worse. Nationalised industries are hugely inefficient and quickly become a drain on the economy, as we know from bitter experience in the 1960s and 1970s. Politicians would exert even more control over the railways, squandering money to buy off special interests and wasting yet more billions on uneconomic vanity projects.

In the 19th Century private firms built and operated a vast network without massive handouts from taxpayers. A similarly innovative and entrepreneurial private rail industry is the best way to improve outcomes and reduce costs. In particular, the same firms should be free to own the tracks and run the trains, as happened in the past. This is the best way of removing the political interference that is holding the industry back.

FOR: Bob Crow, general secretary, RMT

The sheer scale of the chaos over the botched award of the West Coast Main Line franchise played out in the media must have shocked even those who thought that the insanity of rail privatisation could not plumb any further depths.

RMT leader Bob Crow Bob Crow says now is the time for renationalisation

Some 3,200 workers on the [West Coast] line, and hundreds more on associated fleet and service contracts, have been left hanging by a thread. Many of them live and work in areas with a rich and proud tradition as a cornerstone of the British railway industry. The reputation of Britain as the nation that gave the railways to the world has been dragged through the mud by this unmitigated and costly shambles.

Leave aside for a moment the corporate Punch and Judy show between First Group and Virgin and the Whitehall farce that even a scriptwriter on Yes Minister would have ditched as too ridiculous. This fiasco shines the spotlight on the greed and self-serving that has robbed billions in profits and dividends from our railways since privatisation two decades ago.

Now, at last, the vast majority of people are waking up to that cold, hard fact. Recent polls show 70% now support the RMT call for full renationalisation. Online polls show that figure at closer to 90%. The entire political class, including the Labour Party, need to be dragged out of their stupor on this central issue.

With fares set to rise by up to 11% in January to boost private profits, thousands of jobs at risk from the McNulty rail review cuts and ticket offices and stations being smashed up by the politicians and their business allies, the time for renationalisation is here right now.

With the East Coast run efficiently and safely in public hands, and contributing hundreds of millions back to the Treasury and investing in services rather than private profits, the West Coast should be next with the rest to follow under one, single, publicly owned and integrated umbrella.

Bring back British Rail? As an alternative to the greed and chaos on our railways laid bare over the past week? You bet.

 

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  • rate this
    -2

    Comment number 104.

    People have shortmemories- do we really want to return to rail strikes at the drop of a hat, dirty trains and (sorry) some rail staff not bothered whether the customer was satified or not because they were on the state owned gravy-train, and paid irrespective of quality of service.
    Present privatisation not perfect, but a sight better for the passenger than before

  • rate this
    0

    Comment number 103.

    92. chris_ma_ass

    Exactly --- Which at a guess might include Mr Branson .... to be sure Virgin trains made £78 million profit in 2009 - can't find the more recent figures - and I assume that was after paying the government its fair wack of corporation tax ...

    Mr Branson is not making a noise about the tender process from the goodness of is heart ... but more like his stomach (IMHO).

  • rate this
    0

    Comment number 102.

    Everything I use should be free.

  • rate this
    +3

    Comment number 101.

    While a supporter of private enterprise, I feel Dr Wellings is betraying his extreme free market view, onewhich has become exceedingly vocal since the the 1990s. I recently returned from Germany where the state still owns and opperated the vast majority of services which are excellent. I frequently travel by train and the best service I recieve is on East Coast (state owned).

  • rate this
    +2

    Comment number 100.

    I can't see the logic in the taxpayer subsidising the rail companies for them to pay shareholders bonuses? Can't complain with the service on the west coast mainline when I've used them but when it costs 4 times as much as petrol for the journey I defiantly wouldn't go by train if my company wasn't paying

  • rate this
    0

    Comment number 99.

    Re-nationalise the railways? What is this, collective memory loss? Have you honestly forgotten what it was like to travel before privatisation? Let us not return to the dark ages please!

  • rate this
    +3

    Comment number 98.

    The way forward would appear to be the East Coast model where a separate company, owned by the government, operate the services and pay the profits back to the treasury. A word of warning. Whilst the main routes make a profit the minor ones do not and require a subsidy so it's not all plain sailing!

  • rate this
    +1

    Comment number 97.

    Dr Wellings' argument is based on a hypothetical laissez-faire approach. You can never remove the state entirely from the railways and run them like a business because it's a service! That is why privatisation should never have happened.

    I put up with Southeastern daily, and it's a shambles. I don't believe it would be perfect nationalised, but at least elected politicians are accountable!

  • rate this
    +2

    Comment number 96.

    The government has shown why the railways should not be renationalised, with the fiasco they have created over the franchise process. And they've hardly done a good job with East Coast either!

    As for Bob Crow, I'd never trust anything he says... its all about me, me, me with him.

  • rate this
    0

    Comment number 95.

    Privatisation has Failed on ALL our national industries.

    We still have bad service, high prices, and the tax payer still is asked to foot the bill for failure.

    Gas. Electric, water, and rail and roads should ALL be run as profitable companies but owned entirely by us the TAX PAYERS.

  • rate this
    0

    Comment number 94.

    We need a national railway system, not the hotch potch we have at the moment. Fares need to be standardised and brought under control.

    We need more freight to be carried on the railways to free up our congested roads.

  • rate this
    -1

    Comment number 93.

    91. Barry sg. Your surely mistaken, they all need to put their greedy fingers in the pie to ensure we are being fleeced by everyone!

  • rate this
    +3

    Comment number 92.

    My first visit to Aberdeen home of first group I had to take a bus.Only after being on their bus which was late did I find out they don't give change so £10 for a £3 ticket I was robbed.In Dublin you get a receipt for your overpayment and if unclaimed the money goes to charity. It is chapter to run a car than use public transport these days because the industry is run by state sponsored thieves.

  • rate this
    +4

    Comment number 91.

    Maybe renationalisation isn't the answer, but does it make economic sense for the railways in a small country like ours to be operated by as many as 25 passenger train companies, 6 freight companies, 3 train leasing companies, plus Network Rail?

  • rate this
    +4

    Comment number 90.

    Yes!

    All of our key infrastructure operations (not just the railways) should be run as PLCs but with the shareholding 100% owned by the Gopvernment on behalf of the British people.

  • rate this
    +5

    Comment number 89.

    Yes,Bring back British Rail or Britrail or British Railways... BR's subsidy in real terms was a third of what the government is paying to the privatised rail operators. Privatisation has been a massive and expensive mistake,done for political reasons and in a hurry by a weak and ineffectual Tory government just before they lost the 1987 election.

  • rate this
    +2

    Comment number 88.

    We own the tracks, we own the trains, all we need is the staff and some British Rail stickers. Then we can keep the profit and use it to offset the subsidies.

    Remove punishments from operators handing their routes back, and stop new sales of routes. Slowly we'll get all the routes & back we won't need to pay the private operators compensation

    Oh & Bob Crow shouldn't be allowed anywhere near it!

  • rate this
    -7

    Comment number 87.

    A better question would be to ask taxpayers whether they want to pay more for a Government run rail network.

    Or let the private sector foot the bill.


    We as a nation are in no fiscal position to start taking on huge monopolies, unless we are happy to pay much more tax to fund these things.
    I note Mr Crow does not say how it would be paid for ;)

  • rate this
    +7

    Comment number 86.

    Railways are subsidies to such an extent that we may as well bring them back to full public ownership. Private companies should not get any subsidies from tax payers - period. Regardless of industry.

  • rate this
    +2

    Comment number 85.

    We pay the railway companies so much, they might as well be privatised. British Rail coming back, now looks like a good option for all. Same fares for all, no matter where you live.

 

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