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Let’s talk about trains

Tarted up - but at what cost? Abellio's refurbished Mk 3 coach

Tarted up – but at what cost? Abellio’s refurbished Mk 3 coach

The Labour party have announced their intention to take Train Operating Companies (TOCs) into public control, thus effectively nationalising them. The move is more honest and practical than their previous policy, which involved a state company competing for the franchises. No private company would believe they had a chance of success so the result would have been the same, but there would still have been a wasteful franchise process.

Full marks for Jeremy? Well, not from everyone. The TOCs have already rather gingerly opposed the move. You would expect their argument to be based around efficiency and innovation. But instead, the Rail Delivery Group couched its response in terms of the railway covering more of its costs than when franchising was introduced. It goes on to claim, probably correctly but irrelevantly, that journeys have grown faster in the UK than in other countries and then, incredibly, says that the success of UK rail is down to ‘the winning combination of private sector competition and government funding’.

Let’s look at these.

The railway is covering more of its costs. What they mean is: customers (passengers and freight) are covering more of the costs. This is the result of government policy that has placed a greater emphasis on the farebox. The issue of running expenses, in an industry where capital investment requirements are so key, does not help us know the best way to organise the railway.

Railways have grown faster in the UK. The RDG could argue that, since it is Deutsche Bahn, Abellio and others running the franchises, the UK structure helps them function better than they can at home. Yet Germany and the Netherlands don’t seem to be rushing to replicate our structure. And the result is that UK farepayers (and taxpayers) are subsidising less ideological EU neighbours’ train services.

Private sector competition and government funding. There are pockets of competition (London-Birmingham) and a smattering of open access operators but to argue that there is competition other than at the time a franchise is awarded is largely unrealistic (though if there were an alternative on my daily commute to the dismal Abellio I should be very interested). Abellio run Siemens Desiros on the Clacton service, with five seats across. I’m writing this on a South West Trains Desiro on a journey of similar length; with four seats across and tables at which to write it’s a joy. A JOY. In fairness I should say that SWT also run five-across Desiros on shorter routes. And Abellio, though they may not be great at running trains, do have a brilliant Twitter account.

Government funding. Here, paradoxically, the RDG may be on to something. British Rail was subjected to several lurches in Treasury policy. From year to year, BR didn’t know what it was going to be able to invest. The Treasury doesn’t shaft the private TOCs and Network Rail in the same way so investment is smoother and more effective.

Some other arguments:

Safety. Our railway is currently very safe. But the privatised railway also brought us Hatfield and Ladbroke Grove.

Costs. In 2011 it was estimated that the British railway costs 30% more to run than it should. The RDG has been tasked with eliminating this gap; it hasn’t yet. Part of the reason is the artificial and expensive divide between track and train operators which is good at moving money around the system but less good with the trains.

The British Rail myth. Ill-informed idiots have swallowed the lie that you shouldn’t want to ‘bring back British Rail’. But in reality, by the 1990s, British Rail was pretty good. Inter-City was the only profitable operation of its kind in Europe, Network SouthEast had renewed stations and rolling stock and even Regional Railways was in the process of improving. BR as a whole was by some accounts the most efficient railway in Western Europe. And even though the cliché has it that the sandwiches were rubbish, again this was no longer the case by the time of privatisation, and the range of on-train catering was wider than today. Perception lags reality.

Here’s something. In the early 1970s, BR engineers developed the Mark 3 coach. In 2015, Greater Anglia is proudly spending millions upgrading and refurbishing the Mark 3s on the Norwich route. But the coaches as refurbished won’t be able to run after 2020 because GA aren’t replacing the no-longer-compliant toilets. All that expenditure, for a five year period. The company is trumpeting the ‘investment’ but passengers may wonder whether they’ve got value for money. Perhaps the winning combination of private sector competition and government funding is not the be-all and end-all.

As we talk about trains we need to think of the bigger picture. Yes, more trains are being run in some areas. Yes, rolling stock has been replaced, probably about as regularly as BR used to manage when the Treasury allowed it. Yes, some stations have been renewed, some brilliantly like Kings Cross, others appallingly like Corby. But the cost is eye-wateringly expensive. The industry has not been able to bring its costs down adequately, but neither has Labour spelled out exactly what savings they intend to make. None the less they are right to start this debate about the railway’s future organisation.

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This entry was posted on 28 September 2015 by in Management, Politics, Strategy, Uncategorized and tagged , , , .
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