Just caught the end of an article about an increase in rail fares on BBC news.
Now I’m not a rail user, but the railways representative stated something that I can’t quite get my head around.
Please explain.
He stated that rail users only contribute half towards the cost of running the railways, okay I get that.
He then said the other half is paid for by the taxpayer, still okay but a bit Grrrr.
It was then pointed out that they make a tidy profit.
This confuses me a little. How can a business that makes a profit get tax payers help? it seems a bit like getting a loan you never have to pay back.
I’m cross with myself for not understanding this, are the railways nationalised or not?

I don’t believe that there is any railway on earth that makes a profit.
The reason why the TOCs make a profit is because they are private companies and it is built into their franchise. They wouldn’t be doing it if there wasn’t profit involved. Ask John Major about this bastardised system and why vertical integration was rejected as a model.
If you want to be properly outraged you should take a look at NetworkRail directors being given large bonus’ for achieving low accident reporting targets which have since been shown to have been calculated in an unconventional manner.

Maybe the profit is used for capital expenditure? or a knees up at Christmas – one or the other

Its a series of private companies subsidised by the taxpayer – who gets a very bad deal. Subsidy is higher now than pre privatisation as costs have multiplied due to the complexity of the structure and the need to make profits.

Ten years ago my annual train ticket was about £900 (from memory). Last year it was £3048. Looking at yet another rise this year too.

aren’t most modern european efficient train systems fully nationalised??

If they really want to get us brits out of the car we need an efficient inexpensive high speed service like tgv/sncf deutsche bahn/Ice. Never going to happen in the uk sadly because private apparently is king! LOL.

high speed rail? Never gonna happen – ’cause of all the towns in the way.

Only tangentially related, but i always remember hearing the boss of Railtrack (i think) talking on myths about the UK rail system. The interview raised the old ‘Swiss trains are never late, really efficient etc.’ The Railtrack guy pointed out there are as many train journeys run in Kent everyday as there are in the whole of Switzerland.

Can anyone come up with a good argument as to why it was a good idea to privatise rail?

CaptJon – Member

Can anyone come up with a good argument as to why it was a good idea to privatise rail?

I worked in the rail industry for 6 years and even then it never made sense to me.

Back in the day, you had one “company” (British Rail) trying to break-even out of running a railway.

Now you have at least 3 (and usually more like 5 or 6) companies trying to make a profit out of running any given stretch of railway.

How can that result in a cheaper service for the traveller?

I’ve worked a little with SNCF in France as well and they’re actually slightly less nationalised/vertically-integrated than it might appear. SNCF is actually split into two major parts (and quite a few minor ones). If I remember rightly, one half looks after the tracks, the other one looks after the trains (more or less) but I think it’s more about making them accountable to each other than having 2 groups wanting a profit.

in the same way, the road system doesn’t make a profit – the difference being that no one expects it to

Can anyone come up with a good argument as to why it was a good idea to privatise rail?

Efficiency, obviously. 🙄

I remember learning in history that the original point of a nationally organised rail system was to stop the previous chaos caused by dozens of local operators – I guess the Tories never listened in history lessons.

The thing about the rail system which means competition doesn’t work, even if you believe the mantra that competition = efficiency: you don’t decide to go somewhere else because that rail service is better. If you have to get to work in Manchester, you need a ticket to Manchester. It’s not true competition at all.

It’s no wonder the railways cost so much when you know about how the maintenance companies operate too – we’ve gone from a supposedly inefficient nationalised company to still inefficient private companies, but with a massive slice of profit taken off the top.

There are often several layers of subcontractors all taking a slice for doing pretty much nothing – please explain how this is efficient? Aren’t these essentially some of these ‘non-jobs’ we keep hearing about? Oh but they only exist in the public sector right?

There’s been quite a lot published about the privatisation of the railways it was done like this specifically to make it too complicated for the incoming labour government to be able to immediately renationalise it and conjecturally to allow the right people to make money.