Return ticket for BR?

The Times reported this week that discussions are underway that could lead to the gradual re-nationalisation of the UK's railways. It appears that the infrastructure company, Network Rail, is in discussions about also taking over the operation of the trains themselves in Scotland, when the current franchise expires at the end of the decade. In the argot of the industry, this would "reunite the wheels with the tracks". The railways in Scotland would be run by a not-for-profit company (like Network Rail itself). Presumably, if the test in Scotland were deemed a success, the same model could be applied across the rest of the UK as each franchise expired.

In terms of growth in passenger numbers, the UK railways are the most successful in Europe. Nevertheless, just about every day brings new evidence that the privatisation of the industry has been an expensive failure. While France (and Germany and Spain and Italy...) are building new high-speed lines, the UK has spent a fortune on rebuilding one line (the West Coast main line), only to find that the fancy new tilting trains purchased to run on the line cannot be operated at full speed. Trains purchased for commuter lines south of the Thames can't be put into service because they would overload the power circuits. Lunatic leasing arrangements mean that perfectly good rolling stock is taken out of commission as the operating companies try to save money, leaving commuters standing on crowded trains, or simply left behind at the station. Fares spiral ever higher.

The railways are now costing the taxpayer much more in subsidies than they ever did in the days of the old British Rail monopoly. Transport experts regularly declare themselves baffled as to why this is the case. I don't suppose I have a full explanation, but I can think of some pretty good reasons why this has happened. I've heard from people within the public sector that politicians simply did not foresee the number of people that would try to get their snouts in the trough as public services were privatised. Nowhere is this more true than on the railways. I've written here before that my simple commute to London saw me contributing to the coffers of several companies: the car park operator, Network Rail (as operator of the station and the tracks), the train operator, the leasing company that leased the train to the operator, the engineering company carrying out the track maintenance for Network Rail....I'm sure I am missing out a few but the point is clear enough. This is an enormous explosion of overheads.

I think another factor is that the break-up of the old monopoly, contrary to expectations in many quarters, was bound to lead to higher costs even on a like-for-like basis. British Rail was not only a monopolist but also a monopsonist -- the sole buyer for certain services. Workers are the most obvious example. In the old days, if you wanted to drive a train, you worked for BR. You could try to push up your wages and benefits through the union, but you couldn't quit to make more money for similar work elsewhere. In today's environment, you can do exactly that. Unions were quick to realise that the ability of drivers and others to move from one operating company to another gave them plenty of leverage to bid wages up. (One of the worst forecasts at the time of privatisation came from the Economist, which said -- approvingly -- that the breakup of BR would end forever the unions' power over the rail industry). Train driving is now so lucrative that the job appeals to university graduates.

It's beyond doubt that most train users in the UK would like to see the industry back in public hands: after more than a decade of private sector ownership, even BR is looked on with something close to nostalgia. Taxpayers are paying more and passengers are getting less. If the talks in Scotland offer a new way forward, the rest of the UK will be anxious to get on board.