09 June 2016
Another One Along Shortly
by J.R.Thomas
The world of British transport politics is unusually surreal, and has become ever more so recently, under the attentions of Messrs Cameron, Osborne, and Johnson. It is an odd thing that we accept that the free market will provide our clothes and our food and our kitchen cleansers, but reject this model as a way of allocating resources for public transport.
Nor do we think that we should pay the cost of moving about. Food yes, bus no. We get on, we find the fare has gone up from £1 to £1.05, we are outraged. “It’s a public service!” we shriek. “They should subsidise it.” The truth is, “they” do. Many publically owned bus, and all tram, services are subsidised, and the railways are very heavily supported by central government, and in some cases also by local government. In our Business Section last week we alluded to the problems of Network Rail, which owns the infrastructure of the railway system – the tracks, the signalling, most of the stations – and finds itself woefully short of money; so much so that it has ceased life as a freestanding business and is now once again, as it was in the British Railways years, a liability on the Exchequer. The trains themselves are operated by franchisees – effectively short term lessees. Some produce surpluses, but many others are subsidised. Even the supposedly surplus-making franchises have a nasty habit of being abandoned early, as the future arrives without the expected glittering profits. Or, indeed, any profits at all.
Rural public transport is inherently unprofitable – at the level of fares charged anyway – and has been since the advent of the motor bus and motor car, as Dr Beeching recognised only too well. Though what may surprise many commuters, as they stand with their noses jammed in somebody else’s armpit, bouncing into Liverpool Street or Victoria, is that the commuter lines are also very unprofitable. Somehow, in spite of charging high fares, cramming the punters in as tight as they can, and removing nearly all staff from trains other than the driver, the operators manage to lose money and require financial support.
How can this be? Primarily it is because the government, via its various agencies, cannot resist intervening. The Gentleman in Whitehall Knows Best, it was often said after the war. The public meant that sarcastically, but the gentlemen (and ladies) in Whitehall knew they did know best, and they still do. You can’t leave something as complex as transport to the whims of the market, they think; it must be massaged, polished, manipulated, and even directed, to what Whitehall wants to achieve.
This is not surprising perhaps for Labour governments; socialism is about seeking and managing to find a supposed, if often undefined, common good. In the brave new world after the Second World War, the Attlee government took the railways and much of the bus network into public ownership, run by transport commissioners. But, by the 1950’s, the growth of wealth meant that many citizens had access to a car and could go where they wanted, regardless of Whitehall. The numbers of people using public transport – other than for commuting to work – plummeted. The great closure programmes began – the withdrawal of the railways from much of rural England, the closure of the trams and trolley-bus systems in towns and cities.
Then everything changed. The Thatcher Government in 1986 sold off and deregulated most of the bus network. The National Bus Company was broken into more than 70 private operations. Competition broke out on an extraordinary scale; routes began to be adjusted to public demands; fares fell. In fact bus operators began behaving like supermarket operators; and like supermarkets the industry then consolidated. Now about seventy percent of the market is controlled by five big bus operators.
For all her reforming zeal, Mrs Thatcher did not have time to apply this commercial imperative to the railways. That was left to the Major government who, although making bold noises, such as “open access” (to competing operators running on the same lines) and the injection of competition between operators, in practice rather fudged things, leaving control of the tracks in public ownership. But the new system sort of worked. The public subsidies for most routes fell, and both freight and passenger carryings leapt up, a startling reversal of previous trends. In fact, freight on the railways has been an undoubted success – open access has brought in new operators and genuine competition.
But although revenues have shot up on the passenger side, the railways remain a political hot potato. The public grumble about fares (in the way they don’t grumble about the cost of popcorn and pork chops). The trains are too crowded; they don’t run when they are wanted; they are late and unreliable. None of this, it should be said, is especially true. But it gives the politicians, local and national, an excuse to interfere, to promise to make things better.
You might expect this from Labour politicians, but what is surprising is to find Conservative politicians equally keen to seize the steering wheel. The most dramatic and expensive of these Tory transport dreams is HS2, the construction of a brand new high speed railway from London to Birmingham and on to Manchester and Leeds. This is classic politically driven central planning – there is no particular demand for such a railway; and in any case the remains of one exist, the old Great Central Railway, closed in the 1970’s but with its route largely intact and available for reuse. Another strange political initiative has been CrossRail, inspired and driven by the Corporation of the City of London, a very expensive limited-stop underground line, essentially from Liverpool Street to Paddington, a route already covered by two existing lines.
You might consider Boris Johnson to be one of nature’s natural free marketers – but not in transport. One of his last acts as Mayor of London was to sign off Transport for London’s effective nationalisation of much of London’s Overground Railway (as it will henceforth be known) a fairly bizarre scheme to create a railway network that encircles London overground, a sort of outer circle. How many Londoners want to go round in a circle seems to be unresearched. It looks tidy on a map, though.
In the border country south of Edinburgh, the Waverley Railway, closed in 1968, has recently been rebuilt and reopened, mainly as the result of some very effective lobbying in marginal constituencies in the Pentland Hills. What or who it is for and why such facilities are not left to the private sector to provide was not explained, though this one can be blamed on the ScotNats.
It is not just railways that the government is happy to shovel back into the hands of civil servants wanting transportation toys. Some want to play trams – and the government has been busy approving and funding, or at least permitting the local funding, of trams in Manchester, Croydon, and Nottingham, to name just a few. The Edinburgh tram, a massively expensive and hugely delayed short line from Edinburgh Airport to Prince’s Street is at least carrying a lot of passengers – not least because the trams have so jammed up the streets that using them is the only option. Which indeed is the trouble with trams. If they are installed in existing streets they just cause chaos and jam the traffic. They cost a fortune to install, another fortune to maintain, and block up natural traffic flows. That, the transport planners seem to have forgotten, is why they were all ripped up in the 1950’s in favour of cheaper and more flexible buses.
The latest intervention into the transport business is a reversal of the Thatcher bus industry reforms. The government has of course a localism agenda. Now, you might think, what could be more desirably localist than a local bus company, responding to its customers’ needs and changing movement patterns? Not so, says the government. What is needed is direction of the local public transport agenda, as in London, where TfL has done such a splendid job (cynicism alert). So legislation is winding its way through the Commons to hand powers for provincial cities and conurbations with executive mayors, probably Manchester, Tyne and Wear, and Birmingham initially, to set up similar bodies. This has been met with fury by the private bus operators in these cities. It is true that some of those networks have become very profitable, not least because of local semi-monopolies, but also because, like the supermarkets, they concentrate on serving their customers.
Sadly, we have no answers to the questions we posed at the outset of this journey; why does government think it can run a transport system, but not a supermarket chain? And why do citizens think it should?
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