Posted on: 25th July 2017 Posted by: thetorch Comments: 2

by Jacob Olenick

When I was in secondary school in America, I took a comparative government class. Among the countries studied was the UK, then in the midst of its 2015 general election. The SNP were to sweep Scotland, the Lib Dems were set to lose 50 seats, and the Greens were characterized as “eco-Labour weirdos” with silly pledges like renationalising the rails. Two years later, much has changed. Baffling most observers, completely renationalising the rails is now a cornerstone of Corbyn’s Labour. There’s nothing prima facie wrong with looking back at privatisation and asking if it’s been a success. However, to declare it both a failure, and one only solved by complete renationalisation, is rash and extreme. In this article, I address the many real (and imagined) shortcomings of privatised rails in the UK, and suggest Liberal solutions.

The Problem

So, what exactly has changed since privatisation began in 1994? Certainly, the cost of train tickets, adjusting for inflation, has increased by about 25% overall.[i] Furthermore, in London during morning peak hour, the number of passengers was 5.9% higher than the actual capacity of the trains running at the time.i That is to say, tains were not just full, but were oversubscribed. The same holds for most major cities in England and Wales.i And with more than 10% of trains being seriously delayed in 2016, there’s much to complain about. Admittedly, crowding and delays have been fairly constant since privatisation, but that doesn’t make them any less annoying.

The statistics above correspond to many common complaints. Trains are expensive, late, and crowded. A Newcastle teen recently gained international attention by travelling to London via Menorca, claiming it was cheaper than the train fare straight there.[ii] A recent Independent article corroborates this, showing two UK routes which were six times more expensive  than their various European counterparts.[iii] However, both of these rely on deeply flawed anecdotal evidence, and neither make a convincing case for the rather extreme option of total renationalisation.

The story about the Newcastle teen is easily deflated, and it’s disappointing that newspapers ranging from the Independent to the “Torygraph” swallowed it whole. If I want a one-way ticket from Newcastle to London tomorrow morning, the only companies serving this route are Virgin and Cross Country, both of whom do charge around £78 with a Railcard. So far, the story seems to hold. However, this teen was willing to wait at least 24 hours in the airport, on the plane, and in a glorified layover in Menorca. Given this, let’s check for train tickets for the day after tomorrow, and the day after that. Off-peak tickets are closer to £50. Even better, you could take the Tyne and Wear Metro to Sunderland (about £3) to catch a Grand Central train to London for about £30. I invite you to check all these prices on the respective company websites. The teen in the story spent £35 for a less comfortable, much slower ticket to London, probably largely subsidized by the Menorca tourism bureau. A fun trip, but hardly a damning criticism of British rail service.

Perhaps more worrying is the Independent article linked above. It shows two roughly 30- mile English train routes (Luton/London and Liverpool/Manchester) and compares them to four similar length routes in Europe (Dusseldorf/Cologne, Anzio/Rome, and others). The monthly season tickets in England are about six times costlier than the European ones. The study is seriously flawed, however. Both of the English routes are inter-city regular-speed rail lines, whereas the European routes include high-speed rail routes (Dusseldorf/Cologne) and metropolitan routes (Anzio/Rome). Furthermore, comparing the German high-speed rail route with the privately operated one in England (London/Ashford) reveals very similar one-way ticket costs of €17.50 and £8.85 respectively. In other words, the problem exposed by the Independent article is not privatisation, but a shortage of high-speed rails in England.

Causes and Solutions

There are real problems with rail transport in the UK: tickets are more expensive, and crowding and delays remain about as high as they were when privatisation started.

What has gone wrong? Evil corporate greed? Well, partly yes. But there are more causes, most of which would persist under renationalised rails. For example, the number of rail journeys has increased drastically in recent years, more than doubling since 1995.i Meanwhile Tory cuts have kept government support for rails at a nominal (not inflation-adjusted) £5 billion since 2006, with passengers footing the bill through rail fares, which have increased in real terms by about 25% since 1995.i Another artefact of Tory cuts is that, of the three proposed high-speed rail routes, only the first and shortest route has been completed. However, the main problem in my opinion is the length and leniency of rail franchise contracts. Once every seven years or so, companies bid for the privilege of operating a given section of the state-owned rail network. This means that routes served by only one company (say Aberdeen/Inverness, or Swansea/Manchester) have negligible competition until the contract expires. So, the problems are: hugely increased ridership, shrinking government support, and often flimsy inter-rail competition.

Renationalisation would fix some problems: renationalisation is, by definition, more government support, and it would eliminate corporate greed. However, it would not by itself solve problems caused by increased ridership, and it would be drastically less responsive to consumer dissatisfaction than a healthy, competitive rail market. Instead, I propose the following more liberal solutions. First, rail contracts must be briefer to enliven market competition. In addition, the Tory programme of small-government austerity must give way to greater government investment, offset by progressive taxation (like income and land value taxes). Lastly, construction of high-speed rail lines is urgently needed, specifically HS2 connecting London to England’s Northern metropolises, and regular-speed “HS3” running horizontally across the North. The goal of rail policy should be to provide efficient high-quality service through robust market competition. I believe the above proposals would provide this, while Labour’s complete renationalisation program would merely send British trains backwards (figuratively, that is).

Jacob Olenick is a student at Exeter College, Oxford

2 People reacted on this

  1. Read by Wendy and Nick.
    A difficult subject to tackle and well done for all the research you did, and for writing it! We look forward to hearing about what the outcome may be from the powers that be, next time we see you – hopefully in November? Be in touch later.
    Love from Aunty Wendy

  2. It is the complicated nature of the franchise system that adds to the costs, franchise’s own nothing but has to lease everything from trains, stations and track. A system like in Switzerland would be the way to go forward

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