For God’s sake don’t re-nationalise the Railways!

Yesterday’s news on rail fare increases has, as can be expected, been met with the usual cries of outage by special interest groups like Passenger Focus and the RMT. Via Facebook, I found this e-petition to re-nationalise the railways, which has already attracted the signature’s of 1,969 mad fools.  Yes, let’s get the government even more involved in an industry they already wreaked!

Railways are one of those areas (along with health provision) where unless you’re an anorak the pre-state history is almost forgotten. Almost the entire rail network in the UK today was built by private firms before World War 1, and were run successfully for well over a hundred years under private ownership. Yes there were issues after each world war (when the industry was de-facto nationalised and run into the ground to support the war effort), but it was only once the state took over that things really hit the buffers. Wikipedia states:

At its peak in 1950, British Railway’s system was around 21,000 miles (34,000 km) and 6,000 stations. By 1975, the system had shrunk to 12,000 miles (19,000 km) of track and 2,000 stations; it has remained roughly this size thereafter.

All that private capital investment wasted! And they want to give them another go at running it?

Of course the current system is a mess (which even the ASI, who helped draw it up acknowledge), and needs sorting out. Vertical integration, where track and trains are run by the same firm seems to work better than the current system where tracks are owned and maintained by a different organisation. However vertical integration would not fix the biggest  issue since time immemorial – a lack of competition.

It is competition plus Government subsidy and fare caps, that causes the current cycle of endless fare increases. Competing railways can work, I saw this when I visited Japan a few years ago with small cities like Nara having two competing rail lines. Unfortunately there is probably little chance of getting the investment necessary in today’s climate.

Instead I have a modest proposal: when restructuring the industry rather than a PLC go for a mutual structure, and give season ticket holders voting rights at AGM like a building society. If the passengers (and staff) had a greater say in remuneration packages of managers, fares, track and rolling stock investment then we might get somewhere.

Oh, and definitely keep the government the hell away, for whenever a politician meets a train it usually ends in disaster.

Railways in Britain, current (black) and closed by the state (blue)

 

  7 comments for “For God’s sake don’t re-nationalise the Railways!

  1. Dan T
    Aug 17, 2011 at 9:51 pm

    This article seems to be making two points:

    1. Privatised rail is better than nationalised rail.
    2. The current system is a corporatist mess.

    In my view most people would disagree with point 1 & agree with point 2.
    So, personally I would lead with point 2 & not point 1.

    Libertarians seem to be in the habit of making shocking statements & then backing them up with reasoned argument. I doubt that this is an effective way of carrying a message to the wider public. Better IMO to get them onside with a conventional statement & then introducing the more contentious point.

    • Aug 18, 2011 at 5:00 am

      Japan has privatised rail for more than 20 years, and it’s difficult to argue that it’s not the equal or superior of any State/state owned network you can think of. That’s not to say privatisation is a magic wand that instantly makes a countries railways as good as Japan’s – you can privatise and still stuff it up, Britain’s botched privatisation being a case in point. But it does tend to back up the idea that if done right it can end up providing a rail system that is much better than is the norm for nationalised railways.

  2. Aug 18, 2011 at 7:02 am

    I’ve often wondered why, if the commuter fares are so high (with annual moaning n the TV) people don’t travel during the day instead? Then it hit me, those fares might be higher were it not for the cap, so the differential with daytime travel is probably less because daytime travellers are cross subsidising the price-fixed commuter fare.

    I speculate that the price signal of people switching service to avoid massive morning fares is now diluted so, with monopoly status too, the investment that would bring the price down has not occurred.

  3. Aug 18, 2011 at 7:02 pm

    Some interesting responses here.

    Dan T- good point about how to make the arguement. Your right most people would probably agree Nationalised rail is better than private. What annoys me is it is forgotten that it was originally private, but now the narrative is that BR was all fine and dandy until this evil, crazy Tories privatised it.

    Angry Exile- the Japanese model would be a good exmple to use, though even it is still massively subsidised. I remember reading somewhere that the Tokyo-Osaka line is the only part of the Shinkansen network that makes a profit!

    Simon- if like me you’re a regular 37.5 hr/week, 9-5 wage slave it isn’t practical as you can’t get an off peak season ticket, and most firms have core hours you have to be on site for. Plus I already get home late enough as it is, if I got off peak trains I wouldn’t get in before 9 everyday!

  4. Aug 19, 2011 at 1:52 am

    Although the railways were indeed originally privately built, I’m pretty sure it wasn’t exactly free market, and that the state was backing rail expansion, and happy to ride roughshod over property rights in order to do it, but I’d have to investigate.

    I think the mutualist solution is interesting. If I have to choose between nationalisation and corporatism, I’ve got to say, I think I’d prefer the former.

    • Thornavis.
      Oct 4, 2011 at 7:39 pm

      Not entirely, the state was involved to the extent that the railway companies were given the right to enter private land for surveying purposes and limited liability was pretty much invented to allow railways to raise enough capital ( I regard that as a good thing ) but in Britain at least there wasn’t much state interference in the building and running of railways. It was necessary for companies to obtain an act of parliament to allow building and this tended to weed out the weakest schemes.

  5. Anon
    Aug 19, 2011 at 8:37 am

    Your proposal of a mutually owned rail company is already in progress. Take a look here>> http://www.goco.coop/ Whilst is appears a way off from completion, if it proves to be a success it could be a model that could be replicated nationally.

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