Rail subsidy - well fancy that!

Andy Kirkham wrote:

> In January's issue it states "The British rail system receives almost
> £5bn a year in public subsidy - almost four times as much at did when
> privatised in 1994 ...

.... when no new trains had been ordered for years and when maintenance
had been cut to the bone."

Ian

Eh??

There was indeed a hiatus in rolling stock orders around the time of
privatisation, would you order new if you were going out of business?
but the maintenance moratorium was a Railtrack instigated piece of
nonsense

TBirdFrank wrote:

> There was indeed a hiatus in rolling stock orders around the time of
> privatisation, would you order new if you were going out of business?
> but the maintenance moratorium was a Railtrack instigated piece of
> nonsense

Have you see the oft-repeated claim here that BR handed over the WCML
with no temporary speed restrictions? Ever noticed how the number of
/permanent/ speed restrictions carefully isn't mentioned ... ?

Ian

Andy Kirkham wrote:
> In January's issue it states "The British rail system receives almost
> £5bn a year in public subsidy - almost four times as much at did when
> privatised in 1994". Of course this is not news to most of us. I'm
> inclined to think that it is the single most important fact relating to
> the state of Britain's railways today. One might expect it to feature
> prominently in any discussion of the railways, and be continually and
> loudly denounced from various quarters as a national scandal.

Several £100s millions pa of this is spent by Network Rail on
"Bridgeguard". This is rebuilding road bridges to carry 44 tonnes
lorries. This is but one example of the need to treat any headline
figure with caution.

George

"Graeme Wall" <rail@greywall.> wrote in message
news:9d9a6974e%rail@greywall....
>>
>> >> And privatisation brought you Armitt.
>> > And Beeching was appointed under a Tory government
>>
>> But most of the cuts were carried out by a Labour one.
>
> The way things are going the Armitt cuts are likely to be carried out by a
> tory one.

Is that a Brown tory one or a not very green tory one?

--
Tim

Selective killfiling - because life's too short

Ian wrote:
> Andy Kirkham wrote:
>
> > In January's issue it states "The British rail system receives almost
> > £5bn a year in public subsidy - almost four times as much at did when
> > privatised in 1994 ...
>
> ... when no new trains had been ordered for years and when maintenance
> had been cut to the bone."
>
> Ian

Hi Ian,

OK, I would be interested to compare the subsidy in the 10 years prior
to privatisation to the 10 years after. Anyone got the figures??

Tony Polson wrote:

> Currently the subsidy is slightly over £6 billion per annum.

And one twenty fourth of that going to Virgin.

> The West Coast Main Line was handed over at privatisation without a
> single temporary speed restriction (TSR) indicating that the permanent
> way was in excellent condition.

But how many Permanent Speed Restrictions?

> All this new investment, including the introduction of new services,
> rolling stock and infrastructure, was funded entirely out of BR's
> subsidy which was, in real terms, less than a quarter of what the
> privatised network costs the taxpayer now. BR had no borrowings.
> Everything was paid for with cash.

Which is a nother way of saying that BR was under no obigation to make
a return on investment, because new trains were just given to it by the
taxpayer.

> The InterCity sector was highly profitable, and the West Coast main
> line was exceptionally profitable

You mean "made to look profitable by creative accounting", of course.
TOC finances would look rather different if they didn't have to pay for
their trains ...

> It is a complete lie for Ian Johnston to suggest that no new trains
> were ordered, and that maintenance was cut to the bone.

A thousand days of no new trains, wasn't it?

> The truth is
> that all the trains I mentioned above were ordered and paid for in
> cash, not leased with borrowed money.

You seem a little confused about how leasing works.

> I hope that answers your question.

Most entertainingly.

Ian

Ian wrote:

> > All this new investment, including the introduction of new services,
> > rolling stock and infrastructure, was funded entirely out of BR's
> > subsidy which was, in real terms, less than a quarter of what the
> > privatised network costs the taxpayer now. BR had no borrowings.
> > Everything was paid for with cash.
>
> Which is a nother way of saying that BR was under no obigation to make
> a return on investment, because new trains were just given to it by the
> taxpayer.

Er, no it isn't. It is another way of saying that BR managed to buy
its trains etc out of one sixth of the subsidy that the current system
needs.

> > The InterCity sector was highly profitable, and the West Coast main
> > line was exceptionally profitable
>
> You mean "made to look profitable by creative accounting", of course.
> TOC finances would look rather different if they didn't have to pay for
> their trains ...

Wrong again. As Tony explains, the IC services on the WCML had to pay
for the full costs of track maintenance, despite the fact that they
were not responsible for causing all the damage to the track. If
anything, the "creative accounting" used would have tended to
underestimate the profitability of the IC services.

In any case, the *total* amount paid to BR was far smaller than now.
No creative accounting there. Or are you suggesting that BR got secret
extra subsidies from the government?

> > It is a complete lie for Ian Johnston to suggest that no new trains
> > were ordered, and that maintenance was cut to the bone.
>
> A thousand days of no new trains, wasn't it?

1000 days = 3 years. BR was in existence for almost 50 years. To
listen to you guys, one would think BR never bought any trains. We
didn't still have steam engines at privatisation, you know.

> > The truth is
> > that all the trains I mentioned above were ordered and paid for in
> > cash, not leased with borrowed money.
>
> You seem a little confused about how leasing works.
>
> > I hope that answers your question.
>
> Most entertainingly.

Privatisation has been a disaster. Accept it.

Ian wrote:
> Tony Polson wrote:

>
> > It is a complete lie for Ian Johnston to suggest that no new trains
> > were ordered, and that maintenance was cut to the bone.
>
> A thousand days of no new trains, wasn't it?
>

You can't blame the thousand days without new trains on BR. It was a
direct consequence of the privatisation process.

Andy

Brian wrote:
> Ian wrote:

> > Which is a nother way of saying that BR was under no obigation to make
> > a return on investment, because new trains were just given to it by the
> > taxpayer.
>
> Er, no it isn't. It is another way of saying that BR managed to buy
> its trains etc out of one sixth of the subsidy that the current system
> needs.

The point is, though, that it didn't have to make a return on them. Now
that might be sensible for some aspects of state provision - PFI shows
just what insanity can result when hospitals have to show a "profit" -
but it is the case that TOCs don't work on the same basis that BR did,
and it's hard to make sensible comparisons.

> > You mean "made to look profitable by creative accounting", of course.
> > TOC finances would look rather different if they didn't have to pay for
> > their trains ...
>
> Wrong again. As Tony explains, the IC services on the WCML had to pay
> for the full costs of track maintenance, despite the fact that they
> were not responsible for causing all the damage to the track.

That's not the only cost involved, of course.

> In any case, the *total* amount paid to BR was far smaller than now.
> No creative accounting there. Or are you suggesting that BR got secret
> extra subsidies from the government?

Well it did, of course, in the form of social security benefits to low
paid rail workers. That aside, there is no denying that railways are
now costing more than they did. On the other hand, they are carrying a
lot more people in new trains on upgraded tracks, so a like-for-like
comparison is not easy to do. And now that they are forced to provide a
return on capital, more money is being pumped through the economy in a
Keynesian sort of way, so the overall effect is not simple to quantify.

> > A thousand days of no new trains, wasn't it?
>
> 1000 days = 3 years. BR was in existence for almost 50 years. To
> listen to you guys, one would think BR never bought any trains. We
> didn't still have steam engines at privatisation, you know.

I refer the right honourable gentleman to Mr Polson on the subject of
the modernisation plan.

> Privatisation has been a disaster. Accept it.

I never accept anything as simplistic as that. Some bits of
privatisation have been a disaster. Some have been bad. Some have been
neutral, Some have been good. Some have been excellent. Some have been
more than one of these: Scotrail (BR) became a lot better as Scotrail
(National Express) and is now rapidly becoming a lot worse as Scotrail
(First). GNER has been slowly deteriorating. Virgin WC has stayed more
or less the same. Crosscountry got a bit worse, then a lot better.
Thames Trains were disastrous, FGWL seem to be a bit of an improvement.
Chiltern Trains are miles better than BR was on the same route.

State ownership had its advantages and disadvantages. Privatisation has
its advantages and disadvantages. I'd like to see a composite structure
which incorporated the best bits of both.

Ian