Monday 21 September 2015

The People's Railway!


I am always reminded of the McNulty report when this is mentioned. This report is a decade old now and was published in the New Labour years. Above too is the graph showing overall railway subsidies for the past few years. More recently the Government has seen them declined £1.9 billion for this year.

Both are instructive. McNulty concluded that the 30% increase in the cost of rail travel and expenses was due in a large part to excessive staff wages increases caused by unionisation. Of course, this is ignored by all those on the Left.

The graph then shows that now rail subsidies are in line with the long-term average after years of above average subsidy. During the years of above average subsidy passenger rail travel in the UK increased by 50% as the Government (Labour and Tory) cut roadbuilding and spent the money on the railways.

So really, railways are a victim of their own success. The massive Leftie surge to put them in public ownership will probably not make any difference to long term costs. If rail travel is to increase, then subsidies are needed as the costs are too high for private companies to wear when they are subject to price controls. The state will find the same issues when it tries to fund expansion; HS2, Crossrail etc are very, very expensive and the contractors available to deliver it are few and far between, meaning prices will always be high.

I don't really care whether the railways are vertically or horizontally  integrated or owned by the State (today they are effectively sub-contractors of the DfT, so hardly private anyway); but going on about railway re-nationalisation as if it is going to make any difference is just silly. Nothing major will change from the current set up.


Anonymous said...

Who owns and operates all of the railway except the trains? Why the nationalised Network Rail of course.
Who sets the terms for the train operators franchises and micromanages them? Why the DFT?

Which bits of the post privatisation rail industry are almost universally agree to have been a success? The provision of new rolling stock through private leasing companies and the private rail freight companies.

Which bits have been a disaster? Network Rail's stewardship of the infrastructure and incredible bloated costs and the DFT's train procurement (IEP) and fleet allocation.

Res ipsa loquitur

Electro-Kevin said...
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Electro-Kevin said...

It's interesting that the railways were unionised long before privatisation and yet our staff were well underpaid then.

A few years before privatisation my wages as a driver were 30% lower than when I was a police constable and yet here are a couple of facts:

- I was able to become a police officer age 18 1/2 whereas as a driver I had to be 21

- My basic training to become a police officer was 21 weeks. That to be a driver 18 months. My link position at the moment (route knowledge and train type) requires 2 1/2 years of end to end training and courses and routes.

"You don't have to learn routes, you're on rail !" A discussion for later. Rail makes the consequences of mistakes far worse.

The wages weren't pushed up by the unions. Quite the reverse. They have been keen to increase membership (more subs) and make the railways more inclusive to minorities and women by dropping entry tests (such as the machanical aptitude test) which were deemed to be excluding them.


What made wages excessive was the combination of a botched privatisation and a complete underestimation of the levels of training required in some roles. Ladbroke Grove was found to have been in part owing to rushed driver route learning in that the driver hadn't realised that he was heading fast in the wrong direction on the railway equivalent of the M1.

When privatisation happened a few coach operators on the London routes decided to sack a load of drivers just at the same time as a demographic retirement timebomb exploded in the industry. The impact was most keenly felt in London where a driver could hawk his trade between lots of different companies within walking distance of each other - an auction ensued and the first to increase wages was none other than Richard Branson.

The training of replacements took a very long while to catch up.

"But police officers do a more dangerous job"

Of the many police officers I know none have been killed in the line of duty. Of the drivers ? Four.

I don't wish to target police officers but other people do and having been both I am uniquely placed to comment.

The wages have nothing to do with union militancy (though they'd like to credit themselves with it) and I have never been on strike in 25 years of service. I'd resent my union being used as a vehicle to damage a democractically elected government.

The fact is that privatisation was done badly.

In fact a good proportion at my depot are ex coppers and ex Marines. As conservative as you get.

Anonymous said...

You know four drivers who have been killed on the job? Blimey, remind me never to share a mess room with you.

Electro-Kevin said...

Anon - It's something that struck me recently. I worked with the chaps involved at Oxted (x2), Great Heck and knew the chap at Ufton.

It would be an interesting fact to compare when people compare rates of pay between cops and drivers - as they often do and for reasons I can't fathom. As I say - I only raise it because I have experience of the two.

Average house prices in my area are 7x my pay.

Is it that I'm paid too much or is it that other people are paid too little ?

DJK said...

The big growth from 2002 onwards was after Blair 'n Brown abolished 'private sector' (in quotes, because it wasn't really) Railtrack and replaced it with 'not for profit' Network Rail. Not for profit turned out to mean making a loss, whilst absorbing big wodges of taxpayer funds.

dearieme said...

If Corbyn would promise to cancel HS2 I'd forgive him the nationalisation nonsense.

HS2 is such a nonsense that I begin to wonder whether bribery is involved.

Sebastian Weetabix said...

Bribery not required. It's an EU driven project. Not that any of the press are keen to tell you. It goes back to the TEN-R project outlined in The directive 96/48/EC.

The parish council in Westminster is simpky doing what it is told.

hovis said...

Good points - E-K

The Nationalisation privatisation is a bit of red herring as the train operating companies may be privately owned but of do not operate in a recognisable free market ( bat wages as metioned above), once they have the franchise. The "privatisation" word is sop to thos ein love with the idea that free market fundamentals work ..even when there are none in the market in question.
As a whole this is Corporatism, you could call it a form of Capitalism - is is about the [mis]allocation of Capital, but free market - nope.

Electro-Kevin said...

Thank you Hovis.

McNulty was directing his comment at my grade (railway gateline staff on 14k a year would be better off on the dole)

My largest passenger loading is 800 and my lowest 0 (when ferrying empty stock) Let's presume I average 200 passengers per hour and let's presume that they want to cut my pay by £8 an hour to make me equal to a police constable.

Well... you can do the maths to see what a saving that would be on the average ticket.

The Government would be far better dedicated to bringing other people's wages up by limiting immigration than by bringing ours down (I can assure you, I'm not living the high life)

Privatisation introduced competition into the railway in completely the opposite way intended. Crude coach operators mistook us for PSV drivers and thought we could be treated as such.

As for our union being obstructive. Aslef have tried their darndest to make the grade open access to all through their foolish and successful push to abandon entry tests for reasons of diversity. They have been active in minimising training programmes. Any training standard, limit on daily hours, exclusion of applicants by medical is set by government bodies such as the ORR and not Aslef.

The union lost their ability to call national strikes on privatisation and pay deals have been made on a TOC by TOC basis since. And this created competition for sure - but in entirely the wrong way intended.

There is something that those quoting McNulty might not have considered:

The railway selects its staff so that they are careful, sensible and non-risk taking. Therefore the majority of drivers have been investing in their pensions and in property, me included. The start times are more brutal than any other shift work I know. So the pay has to be good.

The price is the price. Whether it's equitable or not is irrelevant and people have been choosing to take flight from London and commute by train instead regardless.

Electro-Kevin said...
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Electro-Kevin said...

Hovis - More pertinent to your response.

And open access/free market railway was never a possibility. It has always been a game for big players.

Under the present set up limited rolling stock goes to the highest bidder. Access charges are high too.

What limits competition most is delay penalties. These are prohibitively high and are used to compensate other TOCs when one blocks the track.

A company trying to run on low costs, going cheap on rolling stock and inexperienced staff would be bankrupted with these charges within months.

CityUnslicker said...

EK - You make some good points indeed. The main issue really has been the expansion of the railways as the expense of the roads network. This has been expensive; staff costs are a factor but rolling stock is astronomically expensive as is electrification.

I just dont see a panacea in nationalisation, it is an expensive wish-fulfillment leftie thing. Privatisastion was botched and did not work perfectly, but has probably worked out at least as well as the old British Rail.

The only thing we as a country have lost is the skill to produce our own technology where once we led; subsidised sate industries like DB and SNCF have done a better job of this but probably at huge cost to their taxpayers.

hovis said...

E-K - I agree the open access/free market railways werent an option - thats why I think the privatisation is a bit of misdirection - the org. structure is the issue.

I don't have an issue with train drivers getting paid a decentish wage - now caroping about high wages is usually done by people who always want someone else wages cut but think themselves incredibly valuable - rather like the old quote 55% of car drivers think they are an above average driver ...

As an aside my old man worked for a while building rolling stock in the old BR days - when BR operated the big works, it worked in it's own way, and change was needed but but the attempts to re-org lost alot of knowledge what would now be called "instititional memory/expertise" and as they closed there was little that took it's place (Bombadier?) so that as far as I am aware most rolling stock is now Italian or German. Which gets us to arguments of efficacy vs efficiency.

Electro-Kevin said...
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Electro-Kevin said...

CU - BR was less subsidised and run by people qualified to do more whilst being paid less. From a personal point of view I shouldn't be advocating nationalisation - privatisation has been the best thing to happen in my career.

Londoners have chosen a rail commute over remaining in London despite the disparities in spending on rail and road. The sheer volume of people getting off our trains at London termini stations would translate to an unmanageable amount of road traffic - and does so even if only one TOC is in dispute.

Where to park the cars when they get to towns and cities ? What of those commuters living 100 miles plus away ? How to increase road speeds to match their trains ?

The railway might be converted to road but the bridges, viaducts and tunnels (the biggest cost) still need to be maintained - all to achieve a B road's width for most of the route.

Let's look at what the railway achieves. Well, it certainly redistributes City wealth to the regions by making them commutable. A nearby station adds wealth to property and certainly gets speculators piling in the money where new railway extensions are planned to be built.

The value people place on the railways is certainly manifest in the effect on their most cherished investment - their houses.

To show I am not overly partisan I would advocate the closure of quite a few branch lines. But these are more often kept open at the behest of elected councils and user groups rather than the unions. Depot closures are well known in the rail industry and I have been made redundant once in my time there.

Why do we pit railway expenditure against road expenditure ? Why not road expenditure against quango expenditure - or road expenditure against foreign aid expenditure, police diversity expenditure, welfare expenditure...

I believe it to be this. Anything resembling statism is anathema to the right and so this comparison is designed to annoy the travelling public. Railway and roads actually assist each other and without rail the road user might get more road but he'd also get a lot more car too.

London house prices would shoot up ever further and become ever more overcrowded and the regions would wither.