I spend quite a lot of time on trains, some of it entirely voluntarily. After all, I like trains. Berlin to Bratislava, Brussels to Copenhagen, Stuttgart to Zagreb are just three of the journeys I've made in recent years. And, when Ros was Party President, we spent a lot of time on trains. So, I do understand a bit about our railway system, and about how other ones work.
And, as my own local franchise is currently in the bidding phase, it is of keen interest to me how the system works.
So, as we're in that week, once a year, when fares go up and people grouse about it, the claim is that the best solution is to renationalise the whole system (as proposed by Jeremy Corbyn and the Labour Party), either piecemeal, by not renewing franchises when they expire, or as a 'big bang'. Frankly, the 'big bang' option is a financial absurdity, so it isn't worth serious consideration.
Curiously, I find myself in a position where I don't really care who runs the trains. What I care about is the level of service and affordability, not the label on the train. So, what are the pros and cons of the current system?
On the plus side, once a franchise is granted, government can't interfere too much. A contract to supply a certain level of services is agreed, and it is up to the train operating company to meet that requirement within the financial package offered at the time of the bid. If subsidy is needed and thought desirable, then the government provides it. If the service is expected to be profitable, then government receives a share of the expected profit. So far, so good. The operating company has an incentive to do better than that, either by attracting extra custom above and beyond that predicted in the initial tendering process, or by charging more.
The trick is getting the franchise agreement right, which tends to be where government falls down. When National Express walked away from the East Anglian franchise, having made a thoroughly awful job of it, they were able to do so on rather beneficial terms due to the weaknesses of the agreement. Frankly, I would have barred them from even bidding for a franchise for at least a decade, but then I haven't forgiven them for stealing my breakfast service...
On the down side, fares have gone up faster than inflation, primarily because government deliberately allowed them to, and capacity hasn't kept up with demand on a number of routes, partly because the train operating companies have to rent rolling stock, rather than own it themselves.
Railway historians will tell you that government ownership is not, in itself, a panacea. One of the things that caused British Rail to perform so badly was the fact that, in government hands, the temptation was to interfere, to cheesepare, to meddle in the proper running of a railway for reasons of politics rather than efficiency or demand. Throughout the fifties, sixties and seventies, our nationalised railway became something of a joke, one that was only really funny if you didn't have to use it. Politicians denied the railway the funds it needed to renew by restricting fare increases in the search for popularity whilst failing to provide alternative funds to allow investment in infrastructure, rolling stock and services.
It need not be so, and I'm sure that those who call for renationalisation have only the best of intentions. But government isn't generally very good at running things where the customer has a choice. We don't approve of paying the sort of salary to someone in the public sector that they could earn in the private one, thus we don't necessarily attract the best people. Innovation and responsiveness to customer demand tend to be sluggish as the various levels of decision-making have to be gone through. And, in truth, if you're going to cut budgets as this government is doing, the temptation to substitute public support with higher ticket prices is awfully tempting, especially if you've promised to ringfence other spending areas.
In my view, sensitive franchise agreements is the key. Incentivise the train operating companies to increase passenger numbers and split the resultant profits, link infrastructure investment to regional policy (assuming, of course, that you have one of those as opposed to a phrase to be repeated when you need to convince people that you care, even if you don't much). Next, allow local government or public bodies to bid for franchises too. If they can do it better, they should be allowed to. And, ultimately, Government shouldn't be afraid to run a franchise itself, if that is the best option.
And one other thing. The Government should be pushing for an opening up of the railway market across Europe. If State-run and controlled entities such as Nederlandse Spoorwagen (Abellio) or Deutsche Bahn (Arriva) can run trains here, we should be able to run services there on an equal basis. There should be a genuine market in providing passenger services, both national and international.
In the end though, sometimes, you just have to understand that running a service costs money, regardless of where that money comes from. In the case of the railways, it either comes from the State, or it comes from the customer. And, if it comes from the State, it comes from the taxpayer anyway, regardless of whether or not they use the service. The question is, how efficiently can you run it, and what are you willing to pay for?
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