Labour's plans for the railways

[Andy Kirkham]

I don't think there's a thread on this topic yet.

 

Any thoughts on Labour's plans to take over all passenger franchises? https://www.theguardian.com/politics/2024/apr/24/labour-promises-rail-nationalisation-within-five-years-of-coming-to-power

 

The Telegraph naturally homes in on  the negative  "Labour refuses to guarantee lower train fares under potential government"

 

One benefit that occurs to me is that it would stop TOC's poaching drivers from other TOCs, removing a disincentive to train more drivers. In a way I'm surprised that ASLEF are in favour of the plan since privatisation has surely driven up their salaries.

 

And it might improve reliability by increasing the pool of staff who can step in and substitute for staff who're off sick.

[Boris]

It's an interesting piece, my take on it is no direct fare decreases but no fare increases, or smaller ones, for the time being, which would mean a slow decrease in the real terms cost of tickets, which kind of makes sense so its a similar model to what Labour did when they changed the English Heritage business model about 20 years ago and it does work.  I'd prefer to see all maintenance brought in house and not relying on more expensive contractors for jobs as well and there is a decent bit of Network Rail infrastructure that is semi-derelict which needs money spending on it too, it's not politically sexy to tell everyone that we're stopping station building and signal box rooves leaking (for example) but it needs doing.

 

 

[Dagworth]

Anything that stops money being siphoned out of the railways into shareholders pockets has to be a good thing. 
 

Andi

[Barclay]

At the moment we seem to have the worst of both worlds - if a service loses money they don't fancy keeping it so the Govt. has to take it over to keep it running. If it makes money, then it's straight into those pockets, so, to me, surely better to have the lot and let the profit-making lines subsidise the others?

[bmb5dnp1]

10 minutes ago, Dagworth said:

Anything that stops money being siphoned out of the railways into shareholders pockets has to be a good thing. 
 

Andi

Hello,

    I've never understand why people have problems with shareholders (which may include your pension scheme) making money as without them there'd be no investment or jobs anyway. Looking at the plan (and assuming I understand it) the plans are almost exactly the same as the present government is working towards. I believe that the ROSCOs and freight companies will remain in private hands ? I thought that the ROSCOs were the main thing that needed reform due to leasing costs etc. It does appear that we haven't learnt the lessons of the past that when the railways are dependent on government spending they will inevitably go to the end of the queue. For instance I don't believe the developments carried out by Chiltern (with private money), eg the Oxford link, redoubling of Bicester-Anyho, introduction of extra rolling stock would have occurred in public hands. I suppose I'm a bit cynical but the plan looks to me to be virtually identical to the present trajectory but it will allow the left wing media to have "Railways Renationalised" headlines which will appeal to Labour's potential voters.

 

                             Dave 

[Daddyman]

26 minutes ago, bmb5dnp1 said:

 I've never understand why people have problems with shareholders

Probably because of this kind of thing (not a railway example, admittedly, but I'm sure figures could be found): 

 

"Since the 1990s, investment from the privatised English water companies has gone down 15%, and they've built up a debt mountain of over £60 billion [...]. Meanwhile, shareholders have received £72billion - £2 billion a year on average." From https://weownit.org.uk/public-ownership/water#:~:text=Since the 1990s%2C investment from,billion a year on average.

 

 

[4630]

21 minutes ago, bmb5dnp1 said:

Hello,

    I've never understand why people have problems with shareholders (which may include your pension scheme) making money as without them there'd be no investment or jobs anyway. 

 

                             Dave 

 

Without wanting to take the thread off in a whole different direction that risks acrimony, the wrath of the moderators and eventual locking, an examination of the history of the privatisation of the water industry and in particular the issues at Thames Water might throw some light on "...why people have problems with shareholders, etc..."

 

The net effect of which is best summed up in my mind by the phrase "Privatise the profits, but socialise any losses."

[KeithHC]

What next Beeching2………..

 

Keith

[bmb5dnp1]

36 minutes ago, 4630 said:

 

Without wanting to take the thread off in a whole different direction that risks acrimony, the wrath of the moderators and eventual locking, an examination of the history of the privatisation of the water industry and in particular the issues at Thames Water might throw some light on "...why people have problems with shareholders, etc..."

 

The net effect of which is best summed up in my mind by the phrase "Privatise the profits, but socialise any losses."

Hello,

   Yes I agree we're on dangerous off-topic grounds. I see your point about some of the water companies but for every Thames Water there are thousands of successful companies based on the capitalist/shareholder model, we only take notice of the disasters. At the end of the day, companies require investment to exist and grow and that money comes from shareholders who reasonably want a return on their cash.

 

Going back on topic, are the ROSCOs a major problem ? I must admit I don't know too much about them but I often see complaints that leasing costs/terms can be very high for outdated rolling stock and also there are sidings full of decent stock lying idle that have been prematurely replaced presumably at a high cost. I understand that the ROSCOs cannot be nationalised due to their ownership structures, the same applies to the freight companies apparently. I would have have thought that these 2 railway functions would have been a higher priority to nationalise/rationalise than the passenger TOCs ?

 

                               Dave

 

                           Dave

[Jeff Smith]

There are some industries/services that are more appropriate in the public sector.  I believe railways are one of them.  Many European countries still think along these lines with rail transport......

[Neil]

32 minutes ago, bmb5dnp1 said:

Hello,

   Yes I agree we're on dangerous off-topic grounds. I see your point about some of the water companies but for every Thames Water there are thousands of successful companies based on the capitalist/shareholder model, we only take notice of the disasters. At the end of the day, companies require investment to exist and grow and that money comes from shareholders who reasonably want a return on their cash.

 

While this might be OK for many companies where we would have a choice of buying or not buying I don't think it works for public utilities. I'd count rail (and bus for that matter) as public utilities as for many there's no choice but to use them and they are a key piece of national infrastructure. They shouldn't be a vehicle for wealth extraction.

 

The shareholder thing is also a bit troubling to a leftie like me (yes I know that pension funds are investors) as the principle behind investment is that those with spare cash are able to make more money while those unable to invest pay more than they need to so that there is spare money to hand over to investors. The rich get richer etc. which strikes me as a bit unfair. Without losers there can't be winners so why would we want to benefit at someone else's expense?

[Ron Ron Ron]

34 minutes ago, bmb5dnp1 said:

........are the ROSCOs a major problem ?    I must admit I don't know too much about them but I often see complaints that leasing costs/terms can be very high for outdated rolling stock and also there are sidings full of decent stock lying idle that have been prematurely replaced presumably at a high cost......

 

There was an issue back in the past, when the early ROSCO's took over the former BR stock, but most of that has gone.

The old BR stock was largely written down, but the leasing costs didn't reflect that.

 

However, the majority of passenger rail stock running today, has been provided by private sector finance over the last (now more than) quarter of a century.

The ROSCO's may own the rail stock, but they owe the purchase costs to a large number of banking and finance consortia.

Without those investors, there couldn't have been the mass re-equipment of passenger stock we've witnessed, over the 28 years post BR.

 

46 minutes ago, bmb5dnp1 said:

......I understand that the ROSCOs cannot be nationalised due to their ownership structures, the same applies to the freight companies apparently. I would have have thought that these 2 railway functions would have been a higher priority to nationalise/rationalise than the passenger TOCs ?

 

 

To "nationalise"  the ROSCO's would mean having to purchase all the rolling stock, which belongs to them and having to find a huge amount of money to pay back the lenders.

There's no way the treasury would allow that.

The sums involved would require serious major cuts elsewhere in public spending.

 

As for the Freight operating companies (FOC's), where is the need too nationalise them?

There is none whatsoever.

Also you can kiss goodbye to any notion of political policies to encourage more freight onto rail.

Nationalised rail freight would be a monopoly and therefore any actions that would penalise competing modes (basically road), would be anti-competitive, illegal and open to challenge.

Attempting to nationalise rail freight would be an ideological fools errand, which is why it's been left out of both Labour and Conservative proposals.

 

 

 

.

[4630]

3 hours ago, Andy Kirkham said:

I don't think there's a thread on this topic yet.

 

Any thoughts on Labour's plans to take over all passenger franchises? https://www.theguardian.com/politics/2024/apr/24/labour-promises-rail-nationalisation-within-five-years-of-coming-to-power

 

The Telegraph naturally homes in on  the negative  "Labour refuses to guarantee lower train fares under potential government"

 

One benefit that occurs to me is that it would stop TOC's poaching drivers from other TOCs, removing a disincentive to train more drivers. In a way I'm surprised that ASLEF are in favour of the plan since privatisation has surely driven up their salaries.

 

And it might improve reliability by increasing the pool of staff who can step in and substitute for staff who're off sick.

 

As always, the devil will be in the detail, for which at the moment, for very good reasons, there isn't a lot of.

 

But to pick up on one particular point in your post to ponder on;

 

3 hours ago, Andy Kirkham said:

 

One benefit that occurs to me is that it would stop TOC's poaching drivers from other TOCs, removing a disincentive to train more drivers. In a way I'm surprised that ASLEF are in favour of the plan since privatisation has surely driven up their salaries.

 

 

In the period from nationalisation in 1948 until privatisation in 1994 British Rail's staff had, to the best of my knowledge, a largely uniform set of employment terms and conditions and pay scales.  I've no doubt there was also some limited local and regional variations to take account of particular variables.  This homegenous situation, not without conflict I grant you, evolved over time by mutual discussion and eventual agreement(s) between BR and the associated trade unions in the industry.

 

The situation now is quite different.  That homogeneity as I understand it is significantly eroded.

 

To give one example, for historical reasons due to the TOCs previously involved and the way that franchises in the north operated and were changed over time, train crews at the current Northern have different sets of terms and conditions depending which side of the Pennines they are based at.  That has implications for the operations of services on Sundays, for example. 

 

But to use your example of train drivers, what's the potential outcome likely to be if there is an attempt to harmonise the drivers' pay scales at say Avanti West Coast (who I understand are at one end of the drivers' pay spectrum) with say Northern (who I understand are towards the other end of the pay spectrum).

 

Do you harmonise pay scales up, or down?

 

If you harmonise up, where does the funding come from to support that?

 

If you harmonise down, what will the impact be?

 

How do you achieve harmonisation overall whilst minimising the impact on staff affected?

 

Over what timescale do you try to achieve that?

 

There are no easy answers here.  And this is just one dimension of a very large and unwieldy issue.

 

As I said at the start, the devil will be in the detail.

 

 

 

 

 

 

 

 

Edited April 25 by 4630

[C126]

16 minutes ago, Ron Ron Ron said:

... any actions that would penalise competing modes (basically road), would be anti-competitive, illegal and open to challenge.

 

As an ideological fool, can I just ask why a suitably composed law can not prohibit challenges?  If a theoretical govt wished to make freight go on a monopolistic railway (and was able to pass a law thus - a big caveat), why can it not pass a law to do this?  Sorry to open a can of worms, but I have often wondered why govts are made out to be impotent with things like this.  Thanks.

 

[phil-b259]

3 hours ago, bmb5dnp1 said:

Hello,

    I've never understand why people have problems with shareholders (which may include your pension scheme) making money as without them there'd be no investment or jobs anyway.

 

Because most shareholders these days seem to be driven by short term greed rather than taking a long term view*. The mantra most work to (and which the City of London spivs, sorry share traders) work is they expect large dividends every year and if the bosses of the company don't comply they will be replaced by those who do.

 

* Things like rolling stock have a 40 year lifespan and they are also not things which you can easily find other uses for - so lends themselves to long term deals were remuneration is low on a yearly basis but which mounts up to be very profitable over a 25 year term. 

 

Not that long ago Unilever came under pressure from shareholders to dump the ice cream sections of the business - and its important to note the justification wasn't it was loss making, rather it wasn't making the bumper profits city investors demand these days.

 

We also saw the profitable chocolate maker Cadbury subject to a hostile takeover by craft - and this was only possible because Kraft mounted a sustained campaign to shareholders based on greed and claims that they weren't getting full value from the company. Of course once the deal was done Kraft took no time in shutting down the ex Cadbury plants in the UK making hundreds of people redundant. 

 

There is also the issue where thinks like the shareholders (like those of the big ROSCOS) are headquartered in tax havens so pay no tax on their dividends and have concern over what problems their demands cause where the operations take place.

Edited April 25 by phil-b259

[Jeremy Cumberland]

There has been no suggestion that I've seen that competition will be outlawed (unlike some post-war nationalisation schemes), and Labour have specifically said that they expect open access operators such as Grand Central, Hull Trains, Lumo and Heathrow Express to continue operating much as they do currently.

 

The shame, to my mind, is that the roscos won't be touched, for reasons @Ron Ron Ron has described better than I could. I will be very interested to see what a Labour government envisages for new rolling stock procurement, whether they will continue to use roscos, or whether new stock will be purchased by the nationalised operator.

[Barclay]

3 minutes ago, Jeremy Cumberland said:

or whether new stock will be purchased by the nationalised operator.

And built in Britain? Or is that just too radical?

[Jeremy Cumberland]

3 minutes ago, Barclay said:

And built in Britain? Or is that just too radical?

Unfortunately the Scottish CalMac ferry saga has rather torpedoed the Buy British (at any cost) mantra for national infrastructure projects. A Labour government might well try and get trains built in Britain, but I doubt it will be very high up their list of priorities, and they will expect value for money. Don't expect to see BREL resurrected.

[Clive martin]

I think this is good news but i dont think we are going to see a return to British Rail as it used to be! I would love to see a return to the old sector business model that was working well with very little subsidy,i  think the freight companys should be left as they are as i dont think they have done a bad job over the last 20 odd years ,i dont know how Labour will deal with the train leasing companys i am quite happy to be corrected if i am wrong but my understanding is that tax payers money goes into the purchase of new stock only for these new vehicles to be handed over to the leasing companys to make a profit ,i think something should have been done years ago privatisation has brought some improvements to the railways but i think their are so  many negatives something must be done sooner rather than later!

[phil-b259]

20 minutes ago, C126 said:

 

As an ideological fool, can I just ask why a suitably composed law can not prohibit challenges?  If a theoretical govt wished to make freight go on a monopolistic railway (and was able to pass a law thus - a big caveat), why can it not pass a law to do this?  Sorry to open a can of worms, but I have often wondered why govts are made out to be impotent with things like this.  Thanks.

 

 

Because they know big business and City Spivs / Hedge Funds / Offshore tax exiles who donate lots of cash to political parties would be outraged - party funds would dwindle, the right wing press would pillory the Government etc.

[C126]

A solution I have rarely seen to the (self-imposed) ideological 'problem' of keeping govt debt below forty per cent. of G.D.P. is by using a 'Statutory Company' to keep the borrowing off the public-sector balance sheets.  This company can then borrow on the open market.  Or is this too simple?

 

[The Stationmaster]

3 hours ago, Andy Kirkham said:

I don't think there's a thread on this topic yet.

 

Any thoughts on Labour's plans to take over all passenger franchises? https://www.theguardian.com/politics/2024/apr/24/labour-promises-rail-nationalisation-within-five-years-of-coming-to-power

 

The Telegraph naturally homes in on  the negative  "Labour refuses to guarantee lower train fares under potential government"

 

One benefit that occurs to me is that it would stop TOC's poaching drivers from other TOCs, removing a disincentive to train more drivers. In a way I'm surprised that ASLEF are in favour of the plan since privatisation has surely driven up their salaries.

 

And it might improve reliability by increasing the pool of staff who can step in and substitute for staff who're off sick.

And a squadron of Gloucester Old Spots has just passed overhead.

 

Under BR Footplate Staff were on an 'all line vacancy list' with the very simple effect that men (most were in those days) moved to unpopoular depots in order to get their grade and then waited their turn to for their seniority in the grade to get them where they really wanted to be (often for better or more interesting turns and very often for more money).  Net result was that certain depots, especially SR inner suburban ones , were perpetually short of Drivers as even those who went there for a grade quite often went elsewhere before they had finished umpteen months worth of road learning.

 

All privatisation did was re-frame the attractions of working in certain places or on certain types of work in a different way from what had gone before - and Drivers at last started to get a basic salary that more correctly matched the responsibilities of their job.  As for telling people where to go in order to work NR has already faced a lot of industrial trouble over trying to to reorganise some staff to s do exactly that.   In reality contractors can get away with it, nationalidsed industries usually can't

 

Fares are of course already set by Govt (or rather DafT) and in most cases ticket revenue goes direct t them, not to the operating companies.  The lack of commercial freedom fort operators is a net result of teh change for franchises and in places it has worked out to the disadvantage of passengers.  But if n effect fares have always in many respects been state controlled so that won't change.  The only change will be if politicos are prepared tp stand the costs of reducing rail fares and that goes straight back to one long standing question in any nationalised industry - would you rather have a new hospital or school etc or would you like 10% etc off train fares or your water bill?  Guess which one will always win - and whatever they say all the politicos know that is the case.

 

But worst of all further state ownership would put more into  the control of DafT - who didn't get that additional letter 'a' in there for nothing.  MPs don't like state controlled railways - it fills their post bags with moans and expectations of them 'doing something';  and, for what it's worth the person who said that was the then Deputy Leader of the Labour Party.

 

So any 'bright new railway' hopes resulting from a Labour Govt are at best illusory and at worst unrealistic.  But the oddest thing about Labour's stance is that it keeps on about nationalising NR - which was effectively nationalised by the Conservatives some years ago.

[Nearholmer]

Some very good things could come out of it, especially in terms of presenting a cogent set of “products” (fares, timetabling information, integration with other modes etc) to potential users, but as others have said the challenge will be funding for asset renewals and upgrades. 
 

My impression, not informed by a great deal of recent analysis I admit, is that the assets (fixed and mobile) that form the railway are not in too bad a shape overall (which isn’t to say that there aren’t parts that are at the point where big money needs to be spent now), but that any funding-starvation could quickly tip things over into “runaway”.
 

Alongside that, there are all sorts of other nationally important assets, hospitals, schools, public housing, electricity supply, water and sewerage systems, some aspects of roads even, that are already into “runaway”, some in public custodianship, some in private custodianship (but just watch the private sector drop hot potatoes when it wants), and a military that needs investment too, so there is going to be a huge by fight for money, and historically when that happened under public ownership, railways were always at the back of the queue.

 

In terms of labour relations, the legacy looks like a poisoned chalice to me, with an El-Bonkers variety of Ts & Cs  and working practices in being, some crucial shortages of highly-skilled staff, and every incentive for current government and TOCs to leave things in the biggest mess imaginable, making only play-acting attempts to resolve current disputes.

 

 

 

[The Stationmaster]

14 minutes ago, C126 said:

A solution I have rarely seen to the (self-imposed) ideological 'problem' of keeping govt debt below forty per cent. of G.D.P. is by using a 'Statutory Company' to keep the borrowing off the public-sector balance sheets.  This company can then borrow on the open market.  Or is this too simple?

 

It didn't work for Network rail - which started as exactly that.  But because Govt guaranteed its debt (how else could it have borrowed money?) that ultimately that it became a state owned company. 

[adb968008]

Anything that puts a new livery onto Thameslinks 700’s is good by me.