Hacker News Reader

Comment by phatfish | Hacker News Reader

Privatisation destroyed rail as a cost effective means of rail travel in the UK. In fact it all fell apart during the pandemic when the government had to take control of a number of franchised routes and temporarily re-nationalize them.

Rail should not be a for-profit business, it is a public service and a natural monopoly. 100% of the money the public pay to make a journey should go back into maintaining the network and running the trains.

I'm happy for a few execs to get their 100k+ salaries and for it to be justified by all the "hard work" and "value" they bring. But taking money from ticket sales, calling it profit and handing it to shareholders has to stop, it means the public get a dysfunctional rail service because there is no investment. Or it works, but the ticket prices are stratospheric.

The Transport for London corporation is a good example of how it should be done.

View on HN

It is very weird as someone who studied British economic history and privatization to see this view so commonly. I am not sure where it has come from (although tbf, the media does not report accurately on this subject).

The main benefit from privatization was a significant reduction in fares combined with massive growth in availability (people take for granted things today that were huge problems then: punctuality, safety, etc.). The rail network in the UK is publicly-owned, what is private is the franchise to operate on a certain route. The lack of investment, if any exists, has come from the govt...and I am not sure there is a lack of investment either...HS2 is going to cost £100bn...£100bn is a large number (as ever, I think people mean...London and the area around me isn't getting enough, this is also false, London receives obscene amounts of investment relative to the rest of the UK).

Also, trains in Europe aren't really cheaper. Tickets are subsidised in Europe, in the UK passengers pay. The main constituency for subsidising the travel costs of wealthy commuters is...wealthy commuters. I am not sure why that idea is inherently attractive (and again, it is worth mentioning...our safety record is best in Europe, there is no real difference in punctuality, our fares are marginally higher but the ecosystem we have is far more robust).

TfL is a great example: sucks down tens of billions in public money to subsidise the wealthiest people in the country...the North-East is still missing motorways and we are spending £20bn on the Elizabeth line...okay. The cost of a fiber roll-out for the whole of the UK is less than the Elizabeth line. The problem is that this has no end because the more infrastructure you build, the more agglomeration, the more infrastructure...London had this problem in the late 19th century with slums, the solution wasn't more density (also, we had to bailout TfL twice I believe, they are not an example of the system working, tbf there isn't a lot management can do with the workforce).

> TfL is a great example: sucks down tens of billions in public money to subsidise the wealthiest people in the country...the North-East is still missing motorways and we are spending £20bn on the Elizabeth line...okay.

TfL no longer receives any central government funding (beyond COVID money, but every aspect of public transport in the U.K. got buckets of money for that), this is despite being required to maintain a significant chunk of London surface roads and bridges. Something that councils normally receive central subsidies for.

Additionally for Crossrail, the Dft only provided £5b in direct funding. The remainder is either loans TfL will have to repay, or has come from locally collected taxes like council tax, and business rates. All of which only impact London residents and businesses.

> also, we had to bailout TfL twice I believe, they are not an example of the system working, tbf there isn't a lot management can do with the workforce

That’s hardly fair. London is the only capital city in the world where it’s public transport get zero subsidies, and costs have to be covered entirely by fare collection and advertising. The central government told people not to take public transport, then forced TfL to run a full service, despite there being 60% fewer passengers. It doesn’t take a genius to figure out that isn’t going to be financially possible, despite TfL always having 6 months of emergency operating capital on hand. Additionally TfL’s status as a local authority means it can’t operate in a deficit, ever. So it can’t borrow to cover short term cash flow issues. Long story short, government rules and requirements placed TfL in a position where it was either getting a bailout, or collapsing. Nothing short of 3 years of spare operating capital, approximately £30b, would have prevented this situation.

Also worth mentioning that every other public transport operator in the U.K. also collapsed, and needed to be bailed out as well. So it’s a little unfair to single out TfL.

TfL has also become a partisan issue because the Conservative government sees it as an arm of the usually Labour controlled Greater London Authority. For instance, when commuters were begging for TfL to take control of the garbage South Eastern routes in the South East of London during Boris Johnson's Majorship (the area most neglected, transport wise), the transport minister at the time vetoed it because it could mean it fell into the hands of a Labour GLA.

I'd say TfL is far far more popular than any of the private companies and for good reason.

If we funded it properly and extended this approach (running things for the people, not for shareholders) to the rest of Britain it would be a good thing.

In theory this is what Great British Rail will do. They own the network and trains, and use a concession model to bring in private entities to actually drive the train and manage the details of day-to-day operations. Exactly how TfL manages their entire network.

You can guarantee that if you make any comment about TfL on here, you will be dogpiled by all the Londoners explaining how their lavish subsidies are actually justified. Every. Single. Time.

I covered most of what you replied to in my answer.

> Londoners explaining how their lavish subsidies are actually justified.

What subsidies? Please be explicit. London contributes £36b more each year to public purse than it receives in public spending [1]. I’m not sure how a net £36b fiscal contribution to to the tax pot can be considered a subsidy, unless your saying it’s unfair that London subsidies the rest of the U.K. to the tune of £36b a year.

I would also point out that Londons contribution to rest of the U.K. has grown £10b over the last 4 years. So London is receiving even less for its tax pounds than ever before.

[1] https://www.ons.gov.uk/economy/governmentpublicsectorandtaxe...

> I covered most of what you replied to in my answer.

I can’t see how that true. I pointed out that a number of things you said were either untrue or misleading.

> The rail network in the UK is publicly-owned, what is private is the franchise to operate on a certain route. The lack of investment, if any exists, has come from the govt

It would be the same story if it were the government operating the trains and private company maintaining the network: of course you're not going to get one organisation to put in more effort when it's a different organisation that sees the benefits. The big success story of privatisation is Chiltern, where there was a long-term arrangement with a single operator that took responsibility for the integrated system of trains, stations and so on. (Though it's notably also one of the few cases where there was real competition between rail lines).

> London and the area around me isn't getting enough, this is also false, London receives obscene amounts of investment relative to the rest of the UK

A smaller proportion of London tax revenue is reinvested there than anywhere else, and projects with a lower objective outside London BCR get funded while higher BCR projects in London get delayed.

> The main constituency for subsidising the travel costs of wealthy commuters is...wealthy commuters. I am not sure why that idea is inherently attractive (and again, it is worth mentioning...our safety record is best in Europe, there is no real difference in punctuality, our fares are marginally higher but the ecosystem we have is far more robust).

The amount of public subsidy going on rail is trivial compared to the amount of public subsidy that explicitly or implicitly goes to roads (such as the huge amount of public land taken out of productive use), and that's even more biased towards the wealthy and carries much bigger negative externalities (pollution, much worse safety record).

> The cost of a fiber roll-out for the whole of the UK is less than the Elizabeth line.

No it isn't, you're comparing the concrete realised costs of Crossrail with the made-up estimates for fiber rollout.

> The problem is that this has no end because the more infrastructure you build, the more agglomeration, the more infrastructure...London had this problem in the late 19th century with slums, the solution wasn't more density

Density is the solution; it's the reason why London is so much more productive and ends up subsidising the rest of the country.

If true, these improvements will certainly only be available on frequent routes. To maintain a train connection to more remote places is often not financially viable so some subsidies or regulations have to be created.

I agree on the "density solutions" however. This just isn't viable, we need other solutions and getting rid of individual transport is a fantasy.

Reply on news.ycombinator.com