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
    +5

    Comment number 144.

    When the track was privatised in the 1990's, safety went out of the window and it had to be renationalised as Railtrack. My private rail provider, Northern, uses old trains which are too small for the passenger numbers. The service seems no better than on the currently nationalised East Coast Line. Where is the evidence that private is best?

  • rate this
    +2

    Comment number 143.

    Privatisation has been run as a cash cow by successive governments since the early 1980s. Each successive sale gives government a short-term lump of cash, sums so far squandered on buying off the electorate with low taxation, high-service administration, rather than infrastructure investment. Furthermore, profit-making entities no longer stay in government hands, and high subsidies increase debt.

  • rate this
    +2

    Comment number 142.

    When considering the cost of railway, comparative cost & benefit analysis must be made to make it meaningful. How much are we subsidising road & shipping per passenger mile? What is the optimal combination of all forms of transport? We need good mathematicians to make these analysis & to make the decisions.

  • rate this
    +1

    Comment number 141.

    Interesting that Wellings should bring up the 19th century entrepreneurs. I take it he is not bothered about the hundreds who were maimed and killed in building the routes or the dubious means often used to acquire the land for the track. Stations being built to serve the needs of the company directors rather than the public. Perhaps we should return to these standards.

  • rate this
    0

    Comment number 140.

    I have yet to hear of any "Think Tank" proposal that bore any relation to reality, nor one that actually worked out in the long run. Too often academics are the VERY LAST persons who should pontificate on anything but theoretical physics, where they can do no harm in the real world.

  • rate this
    +2

    Comment number 139.

    this is a complete shambles bring back good old british rail and be done with it there was nothing wrong with br just under funded

  • rate this
    +5

    Comment number 138.

    In the main I would prefer a publicly owned railway but with conditions. There should be no return to public sector terms and conditions for staff and their existing ones should remain and the second is that Bob Crow should retire, he's a dinosaur from a long gone age. To see and excellent example of a publicly run railway just look at Germany, it's superb.

  • rate this
    +5

    Comment number 137.

    Nationalise the lot, but make sure Bob Crow isn't anywhere near it.

  • rate this
    +3

    Comment number 136.

    I would just like to ENJOY! travelling by train again. Used to be so much fun and so cheap! To have to pay the earth for airless sardine tins where you're packed in like sardines... Don't care who changes it but it needs totally changing... badly...

  • rate this
    +3

    Comment number 135.

    Shouldn't have been privatised in the first place.

  • rate this
    +7

    Comment number 134.

    yes they should be nationalised! If they make all this money for private operators then they should be making money for the country!

    There's no such thing as "public" transport anymore, its all privately owned.

  • rate this
    +4

    Comment number 133.

    I thought nationalisation meant that we foot the bill.

    So isn't that the case now ?

    Except that instead of the money going to improvements and paying staff so they feel valued, it's taken out and put in peoples pockets that do not give a toss about the travelling public or the staff.

  • rate this
    0

    Comment number 132.

    112. Adept
    I've just checked on the National Rail website and I can get a ticket from Liverpool to London, buying in advance, for £12 per person. The highest price is £63.50. I doubt that is more than a week's income for two of you.

  • rate this
    +3

    Comment number 131.

    The national rail network was the exclusive domain of the loony leftie unions who took their orders from Moscow, and who did not care one iota whether the system worked or failed - as long as they could featherbed old technologies to keep the overmanned under-invested system under their total control.

    That hopefully has changed - maybe now we can have an integrated system under public control.

  • rate this
    +1

    Comment number 130.

    @115. Benny, not sure whether you were making an ironic point but the East Coast Main Line is a state-owned franchise ie not private.

  • rate this
    +1

    Comment number 129.

    significant floors please don't even hint at corruption the post will be removed as obviously there are no signs of corruption in govt our leaders are whiter than white and the civil service is beyond reproach

  • rate this
    +2

    Comment number 128.

    2. Peter_Sym

    Can someone in favour of nationalisation suggest where we find the cash to compensate the shareholders (pension funds largely)?

    We'd not have to pay a penny if we simply chose not to renew the franchises when they expired.

  • rate this
    +2

    Comment number 127.

    So Bob Crow wants a return to the days of good old BR? You bet he does! Has anybody ever calculated what the public sector index-linked pension costs would be nowadays for the vast number of BR employees back in 1995? Perhaps more than the profits now taken out of the industry by the private sector? As a poweful union baron would he have had a free-for-life London flat like a certain Mr Scargill?

  • rate this
    0

    Comment number 126.

    "Baby Branson gets his own way again".

    And We get a Rubbish train service again.

    I think that I will start screaming and throwing a tantrum when I don't get my way, and see if I have got the Branson Touch.

  • rate this
    0

    Comment number 125.

    Be reasonable.If there is a chance of easy money to be made,why deprive anyone from making easy money?
    We,the public,get Mega Bucks from selling the Franchise.
    OK..Do admit that the only way the buyers can recoup their money,is via Ticket Sales.
    Somehow,find it very difficult to work out how much money I gained by selling the product.And how much money I gained by buying the product.

 

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