Yes, that is true but the private companies' false profit - which comes out of the subsidies - is an additional unnecessary expense borne by the taxpayer.
Europeans thank Tory Britain
- Thread starter JohnD
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But a nationalised system is not expected to make profit -that's why it's public. The whole point is you chuck as much public money at it as you need to, to keep in the condition you deem acceptable. Hospitals, schools and libraries don't make money, and I don't hear you arguing their costs need to be somehow offset by mythical ones that do, no?
I am not talking about making a profit per se. What I am saying is that IF one of the premises of re-nationalisation is to retain all lines and routes which currently operate then it follows that some of these lines/routes will run at a loss. To balance the books, monies to maintain the operation of those loss-making routes has to come from those lines which are profitable. Hospitals, schools and libraries close all the time due to rising operational costs. There gets to a point where no further public money is going to be thrown at them so they close. If the same route is gone down with the railways, loss-making routes would eventually close which defeats one of the arguments for re-nationalisation.
True. But presumably all lines are currently making a profit for their private owners, so if we nationalised and kept the ticket prices the same and matched the subsidies, then the treasury would suddenly be making a huge profit. So you could in fact lower ticket prices across the board and still break even, with no need to 'offset' certain lines.
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Exactly.
However, the Tories do not believe in such things.
However, the Tories do not believe in such things.
There are a number of lines which don't make a profit. The reason these private companies 'make a profit' from those loss-making lines is down to subsidies and the reduction in rail access costs. Remove the subsidies and reduced access costs for lines such as the east and west coast lines and you would quickly see those private companies dumping them. Those lines have exceptionally high ticket prices purely because they are run 'at a loss'. By way of example, if I wanted to hop on a train now from London to Edinburgh, my one-way ticket would cost me £150. I can fly there for £50 and in a heck of a shorter time. You do the maths.
Maintaining those lines would require money
Maintaining those lines would require money
Yes, but it would be the same amount of money that the taxpayer currently pays anyway. Only the 'ownership' would switch, from private the public.
Public service? National assets?
A good transport system is indeed a national asset.
Not sure if you are agreeing or disputing.
If only that were true...
Let's assume that tomorrow all private rail companies are replaced by a new nationalised outfit (let's call it Brexit Rail
)It is true that HMG would reap the benefit of no longer having to pay the subsidies but this has to be offset by
(a)No repayments coming in from the franchises
(b)The cost of replacing all personnel - all staff and management
(c)The cost of replacing all the current company infrastructure
(d) The cost of such things as track upkeep and rolling stock
Even if we were to agree that the books were balanced or even 'in profit' on Day 1, the ongoing running costs would still need to be at 'break even' across the new network.
What I am saying is that all of this would not negate the current loss-making on certain lines therefore, if HMG's wish was to maintain the current network, those lines would need to be bailed out by monies made elsewhere (on the profitable lines) or require subsidy or closure.
Let's consider the possibility that a single, integrated rail company makes sense, and a fragmented, randomised system doesn't.
Let's consider the possibility that a good transport system is for the benefit of the country as a whole.
Let's consider the possibility that the British railway system is big enough to need its own workshops for building and renovating trains and infrastructure.
Would any sensible person seriously prefer the current ramshackle collection?
Let's consider the possibility that a good transport system is for the benefit of the country as a whole.
Let's consider the possibility that the British railway system is big enough to need its own workshops for building and renovating trains and infrastructure.
Would any sensible person seriously prefer the current ramshackle collection?
I don't follow you.
Suppose: Private rail company makes £1b from sale of tickets etc. Running costs are £1.8b. Gov subsidises them a further £1b. Profit = £0.2b
Brexit Rail takes over. (I assume all the staff stay on and the infrastructure is handed over. The government already manages the track and signalling anyway (Network Rail).
Treasury now receives £1b from sale of tickets etc. Running costs are £1.8b. Treasury makes up difference with £0.8b. Taxpayer saving: £0.2b.
(Even if the staff didn't stay on, the cost of rehiring would probably be covered by that £0.2b, so the taxpayer is no worse off on the deal). Not that I think nationalisation is actually a good idea.
Suppose: Private rail company makes £1b from sale of tickets etc. Running costs are £1.8b. Gov subsidises them a further £1b. Profit = £0.2b
Brexit Rail takes over. (I assume all the staff stay on and the infrastructure is handed over. The government already manages the track and signalling anyway (Network Rail).
Treasury now receives £1b from sale of tickets etc. Running costs are £1.8b. Treasury makes up difference with £0.8b. Taxpayer saving: £0.2b.
(Even if the staff didn't stay on, the cost of rehiring would probably be covered by that £0.2b, so the taxpayer is no worse off on the deal). Not that I think nationalisation is actually a good idea.
I really don't care either way. Whatever system is in place (private or re-nationalised) railway travel is really up against it as a way of getting from A to B save for those poor barstewards who are forced to use it for their daily commute or those purists and tourists for who it is a thrilling experience.
And what about the rolling stock? And what about the inevitable additional management tiers ....
As I said, even if you can balance the books on Day 1, some parts of the network will run at a loss (running costs v ticket sales) so those parts will need to break even by monies from the other parts.
It comes back to my original point which is explained in my response to JD above
As I said, even if you can balance the books on Day 1, some parts of the network will run at a loss (running costs v ticket sales) so those parts will need to break even by monies from the other parts.
It comes back to my original point which is explained in my response to JD above
Perhaps the playing field could be levelled a bit and privatise the road network ,and charge tax on aircraft fuel too.
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