Is this fair.

[Stationbeem]

If this is in the wrong forum could a Mod please move it to the correct one.. Thank you.

What's your thoughts on this.........

http://money.uk.msn.com/investing/articles/nicklouth/article.aspx?cp-documentid=147411376

 

[bl4882]

That is an extremely interesting article, but first I think it is important to distinguish "cost" from "fares." While the evidence of this article is that fares have certainly increased, I doubt that costs have increased much. As the article says, fares are increasing because of a commitment to recoup 75% of the cost of operations from the fare box instead of 50%.

This sort of thing happens for a reason. If the users of rail are unsatisfied with a 25% subsidy as opposed to 50%, politicians probably sense the general populace who may never use the trains, and perhaps even the riders themselves, would be livid at the tax increases it will take to continue the 50% subsidy as opposed to the reduction to 25%, especially taking into account the rapidly diminishing return of tax increases. Livid constituency means not getting re-elected.

Sounds as if the solution is either a) convince the taxpayers it is worth it to them to pay more to the government to maintain high rail subsidies, or b) try to conceal the taxes by taxing businesses and hope no one realizes they will have to pay more for their muffins and other things they buy on a day to day basis. But, of course, they do notice this eventually and then the stuff hits the fan.

Either way, to paraphrase the article's statement of the issue more bluntly: At whose expense will the subsidized train riders travel? I don't presume to know the answer to the question, but I do know that it is not enough to insist that the service is needed. The money has to come from somewhere if it is to be maintained and the people are going to have to decide what its source will be.

Not to suggest schadenfreude on your part, but you might take some consolation that the UK is not alone. We are facing the same problem here in the US as the economic shakeout is forcing people to take a good look at where all their money they send to Washington and their state capitals is going, and not just to rail but to myriad other subsidy programs.

Bernie

 

[sethmcs]

The obvious solution is to reduce the petro tax to zero, the subsidies to zero, and the government interest to zero. Maybe more folks would buy cars. Trains are for freight. That's how we do it in my part of the world. I know spoken like a true Yank.:hehe:

 

[paulzmay]

Reforming Britain's railways resemble that apocryphal piece of advice for a lost and weary traveller: "How do you get to Nottingham? Well, I wouldn't start from here."

I think that sums it up really... Rail privatisation in the UK has been for the most part a disaster, especially compared with what could have been achieved with the additional subsidy had BR still run the railway.

That is an extremely interesting article, but first I think it is important to distinguish "cost" from "fares." While the evidence of this article is that fares have certainly increased, I doubt that costs have increased much. As the article says, fares are increasing because of a commitment to recoup 75% of the cost of operations from the fare box instead of 50%.

Unfortunately, privatisation did exactly the opposite of what was intended. Cost have spiralled as 200+ companies now do the job BR did. The then government expected that private operators would be able to save massively on the operating costs of the old 'inefficient' BR, but in fact they found that decades of running a cash starved railway had already made BR the leanest railway in Europe. In 1994, before privatisation the railway was supported to the tune of GBP1.6m - in 2005 the figure had increased to GBP4.6m, without substantial improvement in the service. Most of the 1994 subsidy was for 'Regional Railways', the division which ran local services outside the south east. Inter-City services were profitable, and London's commuter services were not far from break even.

It's difficult to see where to go from here - the railway is structurally a basket case: overloaded, under-maintained, and far too expensive, but in a small crowded island with the threat of climate change and peak oil hanging over, something has to be done. At the moment it's hard to see how Britain's railways can be made to carry a greater share of traffic without extra cost. Subsidies are probably higher than in many European countries, but without the low fares and quality service to match.

Just my 2c...

Paul

 

[Tokkyu40]

The obvious solution is to reduce the petro tax to zero, the subsidies to zero, and the government interest to zero. Maybe more folks would buy cars. Trains are for freight. That's how we do it in my part of the world. I know spoken like a true Yank.:hehe:

And then take the subsidies out of the road. Car owners would pay for all the costs of building and maintaining the roads instead of so much of it being subsidized. By increasing the gas taxes and registration fees to reflect the true costs of the infrastructure, people will be able to make a free and informed choice.
By the way, did you know most American light rail systems pay for themselves through increased tax revenue from the economic development that a stable and reliable transportation system brings? Since it doesn't go directly into the fare box, those revenues are rarely counted and we pretend that the trains have to be subsidized.
Rails are for travelling. Scooters are for errands. Cars are wasteful toys.

 

[sethmcs]

Cars are wasteful toys.

Not when you live in the country. The city perhaps.

 

[knil2gni]

The demise of Britains railways as a public service.

What else can you expect from a dysfunctional government now in disgrace over fraudulent claims, and that has lead the U.K. into bankruptcy.
The Post Office is the next victim.

 

[leswell]

British railways in decline? - Hardly!

What else can you expect from a dysfunctional government now in disgrace over fraudulent claims, and that has lead the U.K. into bankruptcy.
The Post Office is the next victim.

Should we be seeing political comment like this on this forum, especially when it is full of errors? It is Parliament, with corrupt MP's from all sides that is in disgrace over the expenses scandal here not the Labour Government in particular. I don't recall any millionaire Labour MP's claiming for moats to be cleaned out.

As for the alleged decline of our railways how can this be so when they are now carrying record numbers of passengers and even Eddie Stobart (a major UK road haulage firm) has started transferring goods by rail because he finds it more economical? Leeds City station, for example, has recently been rebuilt and the track layout improved. We now have the new high speed line into the refurbished St. Pancreas station from the Tunnel operating. They have already started work on improving King's Cross next door. Hardly indicators of decline I would have thought. Oh I forget. The construction of Cross Rail north of London has just begun. Did you miss that?

This is more like revival particularly as both major parties are looking at extending high speed lines across the nation.

Trans-Pennine trains are doing particularly well with frequent trains full of passengers throughout the day. I have recently been walking along the Leeds Liverpool canal in the Aire valley. The Aire valley railway line runs alongside and I was amazed at the amount of rail traffic both passenger and freight passing, some of which heads north up the now revived Settle-Carlise route. I guess the line is operating near to capacity at times between Leeds and Skipton (now electrified) where the line branches and electric commuter trains terminate. It used to carry quad track but was reduced to double when the railways were in decline back in the sixties. Even once closed stations by Beeching are being re-opened.

 

[bl4882]

Should we be seeing political comment like this on this forum, especially when it is full of errors?

How does one get politics out of a forum on railroading when the government, run by politicians, is paying the tab and calling the shots?

Bernie

 

[knil2gni]

Should we be seeing political comment like this on this forum, especially when it is full of errors? It is Parliament, with corrupt MP's from all sides that is in disgrace over the expenses scandal here not the Labour Government in particular. I don't recall any millionaire Labour MP's claiming for moats to be cleaned out.

As for the alleged decline of our railways how can this be so when they are now carrying record numbers of passengers and even Eddie Stobart (a major UK road haulage firm) has started transferring goods by rail because he finds it more economical? Leeds City station, for example, has recently been rebuilt and the track layout improved. We now have the new high speed line into the refurbished St. Pancreas station from the Tunnel operating. They have already started work on improving King's Cross next door. Hardly indicators of decline I would have thought. Oh I forget. The construction of Cross Rail north of London has just begun. Did you miss that?

This is more like revival particularly as both major parties are looking at extending high speed lines across the nation.

Trans-Pennine trains are doing particularly well with frequent trains full of passengers throughout the day. I have recently been walking along the Leeds Liverpool canal in the Aire valley. The Aire valley railway line runs alongside and I was amazed at the amount of rail traffic both passenger and freight passing, some of which heads north up the now revived Settle-Carlise route. I guess the line is operating near to capacity at times between Leeds and Skipton (now electrified) where the line branches and electric commuter trains terminate. It used to carry quad track but was reduced to double when the railways were in decline back in the sixties. Even once closed stations by Beeching are being re-opened.

I was a railwayman before the day's of Beeching. During that period, the railways carried over 60% of every thing that was movable, from steam turbines to cartons of jam day and night. Why even house and furniture removals were undertaken by the railways in those years. In terms of size, before Beeching the railway was a vast industry, by comparison, to-day it is small.
I don't apoligise for making a political point. It was the damned politicians that wrecked the system in the first place.

 

[paulzmay]

I think it's fair to say that British governments of all colours have done the railways a massive dis-service, and that this goes back way before Beeching. The history of how the UK's railways got into this mess is a long and depressing onem and privatisation (and the current government's inability to fix it after 12 years) is only the latest chapter in a tale of interference, mis-management, and cuts. The system under which rail was common carrier worked well when there was no real road competition, but as government set all freight rates, rail couldn't adjust to compete, or recover their true costs.

@leswell - yes there is some good news from the rail industry. The issue at hand is really why it costs so much more to run than it did under state control, despite increasing fares and ridership, and whether the system is capable of ever handling the even larger passenger and freight numbers that would be required if oil dependency, climate change and congestion are to be addressed. At the moment it looks as if more capacity and greater ridership at lower fares would almost bankrupt the country (I exaggerate). The rest of the world seems to be capable of running a well used, intensive rail network at reasonable fares and recover much of it's costs (most true high speed rail - Eurostar excepted - seems to be at least marginally profitable), but the UK's insane organisational structure seems to dictate that profits are made and subsidies spiral out of control, without any real mechanism for the kind of investment in the future that is required.

Note also that the major projects such as Crossrail and High speed rail have not exactly sped ahead under privatisation. Rail re-openings almost completely stopped as well, as Railtrack's costs for doing the work doubled (or more). A lot more stations re-opened under the Tories than under the current Labour government.

Anyway, that felt more like 3c this time...

Paul

 

[BLACKWATCH]

And then take the subsidies out of the road. Car owners would pay for all the costs of building and maintaining the roads instead of so much of it being subsidized. By increasing the gas taxes and registration fees to reflect the true costs of the infrastructure

Here in the UK, the motorist's and road hauliers already pay more in taxes, than it costs the government to build & maintain the road infrastructure, so that wouldn't work here.

 

[knil2gni]

Privitisation ???

I think it's fair to say that British governments of all colours have done the railways a massive dis-service, and that this goes back way before Beeching. The history of how the UK's railways got into this mess is a long and depressing onem and privatisation (and the current government's inability to fix it after 12 years) is only the latest chapter in a tale of interference, mis-management, and cuts. The system under which rail was common carrier worked well when there was no real road competition, but as government set all freight rates, rail couldn't adjust to compete, or recover their true costs.

@leswell - yes there is some good news from the rail industry. The issue at hand is really why it costs so much more to run than it did under state control, despite increasing fares and ridership, and whether the system is capable of ever handling the even larger passenger and freight numbers that would be required if oil dependency, climate change and congestion are to be addressed. At the moment it looks as if more capacity and greater ridership at lower fares would almost bankrupt the country (I exaggerate). The rest of the world seems to be capable of running a well used, intensive rail network at reasonable fares and recover much of it's costs (most true high speed rail - Eurostar excepted - seems to be at least marginally profitable), but the UK's insane organisational structure seems to dictate that profits are made and subsidies spiral out of control, without any real mechanism for the kind of investment in the future that is required.

Note also that the major projects such as Crossrail and High speed rail have not exactly sped ahead under privatisation. Rail re-openings almost completely stopped as well, as Railtrack's costs for doing the work doubled (or more). A lot more stations re-opened under the Tories than under the current Labour government.

Anyway, that felt more like 3c this time...

Paul

I wish to add. The private railway companies here in the U.K. also include French and American companies who enjoy huge subsidies from the British government to keep them afloat.
Bear in mind that should this experiment begin to unravel, they the American and French would disappear back across Atlantic and the Channel in double quick time.
And who would be left to pay the bill.......as usual.......muggins the long suffering British tax payer.

 

[paulzmay]

Here in the UK, the motorist's and road hauliers already pay more in taxes, than it costs the government to build & maintain the road infrastructure, so that wouldn't work here.

That's true for private motorists, but as HGVs account for almost all the wear and tear on UK roads, it's pretty unlikely that they do pay the full cost. As it is road taxes only go into the general pool of taxation, so if petrol was cheaper, you'd pay more income tax. Here in Australia, where petrol is much cheaper, a 3 litre V6 is considered to be an average family car, and might even be advertised as economical, or even green. One of my work colleagues even owns a 5.4 litre V8. High European petrol taxes have lead to European cars being much more efficient and smaller than their Australian and American counterparts, and have made public transport relatively more attractive. Only the British government in Western Europe has managed to comprehensively screw this up...

Paul

 

[BLACKWATCH]

Paulzmay, as HGVs account for almost all the wear and tear on UK roads, it's pretty unlikely that they do pay the full cost.

HGV's can pay as much as £1,850 per year in Road Fund Licence alone, that's without the huge fuel taxes they have to pay on top, plus bridge & motorway tolls(taxes).
When you consider how much is moved by road in the UK, the taxes raised are astronomical from HGV's alone.

 

[paulzmay]

HGV's can pay as much as £1,850 per year in Road Fund Licence alone, that's without the huge fuel taxes they have to pay on top, plus bridge & motorway tolls(taxes).
When you consider how much is moved by road in the UK, the taxes raised are astronomical from HGV's alone.

All of six quid a day?

The question though is surely not whether any mode pays enough tax to cover all it's costs (and bear in mind that road maintenance is only one of the external costs associated with road freight), but whether the regime of taxes sends the right price signals to affect peoples and businesses transport decisions. So if we want more freight on rail, perhaps road freight should pay a little over the odds.

Incidentally this report explains the costs assumed by the UK Strategic Rail Authority of road freight by road type: http://www.dft.gov.uk/pgr/freight/railfreight/slmp/sensitivelorrymilesevaluatio.pdf These are the figures they use when looking at the justifications for rail freight grants. This report also gives a bit of an idea about how well lorries cover their costs in tax: http://www.bettertransport.org.uk/system/files/heavy_lorries_MTRU_research.pdf

And there's still only one toll motorway in the UK last time I looked (the M6 Toll) - road hauliers I guess will use that when it pays them (in time saved) to do so, so it's not really a cost.

Paul

 

[Isaacg]

Maybe more folks would buy cars. Trains are for freight. That's how we do it in my part of the world.

That's horrible :hehe:....

Has Britain ever thought of re-nationalisation again? I dunno, I must've been hallucinating, but I thought I saw an article that suggested re-nationalisation a few months ago. Either way, when Britain renationalises, the United States will be privatising

 

[paulzmay]

There's been lots of articles suggesting it, but that's about as far as it goes. Re-nationalisation is expensive, without any real guarantee that it will work. Network rail is now a non-profit making company, and has brought it's maintenance activities in-house, and the franchises could simply not be re-let, or be bought back quite affordably. What is not so cheap is buying back the rolling stock companies. Any government contemplating re-nationalisation has to balance the cost against the unquantifiable improvements and inevitable disruption.

Paul

 

[Paulsw2]

There's no question the Tories made a good job of smashing Britain's railways into a thousand pieces specifically in order to make it very difficult to re-nationalise.

But then again, it turns out that 'new' Labour shared the same pro-privatisation ideology and so had no intention of re-nationalising anyway. They've spent more trying to make privatisation 'work' than it would have cost to re-nationalise (and re-integrate) the system back in 1997.

So the rotten, ideologically driven and insane organisation of our railways (which no-one else in the world has chosen to emulate) will continue into the indefinite future.....

Paul

 

[Stationbeem]

Thank you all for your comments and thoughts for this article. Many interesting arguments for and against. Also a very big Thank You for the calm way in which you put your points across. Just shows we can have a debate around the world without being childish.


Could a Moderator please lock this thread I think it has run its course.

Thank You Dave.