Go on Ed, be brave and end franchising 2

May 6th, 2014 Times
Politicians sometimes need to be brave and this is one such moment for Ed Miliband over the future of the railways. He is being pressed hard by swathes of his own party to end the present policy of franchising out the whole network and instead take back into public ownership the franchises as they run out. 
 
He should do it. For once, radicalism and the public mood are at one. Rail passengers have never warmed to the Arrivas, Stagecoaches and even Virgins that run today’s railway. They know instinctively that an industry that needs £4 billion in subsidy annually and is a vital part of the nation’s infrastructure has no business being run by short-term franchisees whose profits come out of taxpayers’ pockets. 
 
Normally, capitalism rewards business either for taking risks or for investing, but the operators do neither. If they start to lose money, they simply throw the towel in, as happened with National Express on the East Coast in 2009.
 
There are other huge downsides to the franchising system. The process is costly and the fiasco two years ago over the West Coast main line franchise meant the Department for Transport had to haul in dozens of expensive consultants. Even now most franchises are being let as single-tender awards where negotiations are held with only one company, the incumbent. The whole competition element that is supposed to drive down costs is nullified.
 
Taking back the franchises as they run out and handing them over to a new organisation (called British Rail — or perhaps, if that is too retro, Rail Britain) would actually free the railways from this overbearing control. 
 
There are risks, though. Insiders tell me there is already a £350 million gap in the railways budget, which means fares might not be held down as much as supporters of renationalisation suggest. Money for investment, too, might be a problem given Ed Balls’ austerity policy. Opponents will accuse Mr Miliband of going back to old Labour days.
 
Nevertheless, the advantages for him in going for a policy of gradual renationalisation outweigh those risks. He has been brave in taking on both energy companies and private landlords. Taking on the train companies fits in with the zeitgeist. Go for it, Ed.

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  • RapidAssistant

    The sort of wishy-washy “we might, but might not” language – full of grand, but ultimately generic statements is precisely the sort of ramblings from politicians that we’ve had for the last few years – Miliband being one of the biggest culprits. And it typifies exactly why we have a hung parliament at the moment – and in my humble opinion….heading for another one. Politicians seem to be obsessed with the centre ground and winning votes than actually offering clear choices. It’s dull.

    It’s not just the economy that suffering from austerity, it’s the political debate. The whole reason why UKIP and to a lesser extent – the Scottish indepedence referendum – are attracting so much headlines at the moment is that they are proposing to shake up things up and put forward something – rightly or wrongly – markedly different from what’s on offer at the moment. That awful Portillo-ism “clear blue water” between the parties has never been so needed than at the present time.

  • Paul Holt

    CW has missed the target. People do not care whether any particular rail route has or has not been franchised. People care about getting from A to B. And if the rail route between A and B has been taken away by Beeching, they want it restored. The Dawlish rail link was broken by the Winter storms, cutting off the south-west. There was a relief inland route which might been used, but it had been taken away by Beeching. It might be late, but it is time CW began hitting the target, which is to praise the engineers for restoring the Dawlish rail link, then to reinstate the relief inland route, then reinstating the Varsity Line (Oxford to Cambridge), then the Braintree to Stansted link, and so on. None of this is rocket science!

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