Farely unfair

The problem is that for many of these commuters, they can't vote with their feet because they have to go to work. And as there are no viable alternatives for getting into London, they have little choice but to pay up.

If anything, the problem has got steadily worse because, although the headline fares have increased by the stated percentage, the TOCs then proceed to offer heavily discounted fares, so the actual yield per passenger km remains pretty flat - a self-inflicted and unnecessary wound, therefore. The easiest case to see this is west Coast, where the franchise is pretty similar in geographical scope to the old BR IC unit; the actual cash yielded by the franchise is much the same allowing for inflation, yet there has been unremitting headline fares increases since Virgin tookmover with outrageous headline fares accompanied by heavy discounts with absurd restrictions. Net result - zero increase in real terms revenue. What's the point? [ It isn't as if all this yield management has actually enabled Virgin to run the service more cheaply - in fact, the train km have nearly doubled just to produce the same yield as before: a rotten way to run their business].

GH

Call me old fashioned but I though running a business consisted of being efficient, not being subsidised by the taxpayer and then bailed out when your franchise fails to make money, as per East Midland Trains recently. Also you invest for the future from your profits rather than pay a tycooon with a private island and his cohort with a McCastle, massive dividends!

Hang on a minute foul, McCastle man, you are a many headed franchise beast that wins when he loses and wins when he wins however the public always lose!

Bring back BR!

XF

Now, where is Maggie Thatcher. ;D

Yes she started her non illustrious career with the nickname (milk snatcher) Some of us knew if she became Prime Minister wholesale privatisation was on the cards. (Apologies for being a little off topic)

Actually, and surprisingly, Mrs T, although a great enemy of BR and LT, always rejected rail privatisation whenever issue came up in Cabinet. She was wont to say that there were two state industries that she would not allow to be privatised - the railways and the Post Office - because she thought that that would be politically disastrous. It was only John Major, who so desperately wanted to be different, who allowed it, indeed encouraged it, to be done.

GH

Indeed - When Thatcher was asked about privatisation of the Royal Mail, she retorted, "I won't touch anything royal." Major was the one who started rail privatisation. He wanted a big 4 style railway but was defeated by the Treasury who wanted to break up the system to hundreds of companies so to get the maximum amount of money from the system. We've been paying the price ever since.

metrailway - mind you, BR tried to be too clever and defeat the Major preference by arguing that because freight would cross the boundaries of the revived big four, a geographically-based approach wouldn't work. This was music to HMT's ear (and poor history). So far as the Treasury was concerned, the objective was to raise cash, not create viable businesses, and to privatise debt - hence the rigged prices for the really big ticket items such as the ROSCOs, which were, and are, really a form of private gilt, for investment purposes.

GH

A private sector business operates by using private capital to fund improvements in the expectation that the future revenue will repay it with sufficient profit to declare a dividend - and to take the risk that it won't. But in the railways the private capital funding the improvements is mine and yours, as the farepayers, but the shareholders of Stagecoach and the like get the profits.

If there was any competition this business model wouldn't work - current customers cross-subsidising the future passengers who will see the actual benefit - for example car manufacturers have to discount, not increase, the price of their obsolete models.

The trains on my line have been there longer than I have, and I will have retired before they are due to be replaced, but I'm still expected to pay the higher fares. One year we even had higher increases than the RPI+ formula but thatw as all right "because they had reduced the fares elsewhere" - as if it is as easy to switch your commute as to change your brand of cornflakes. Funy that the rduced fares were on lines where they had competition. When you have a monopoly, nothing you do to your prices will increase (or decrease) your market share

And of course, there is no real finicial risk to an operator or ppi beacuse if an essential service like a hospital or a railway goes bust they can't simply stop operating but have to be bailed out by the government.

Complete privatisation of the Tube was only narrowly avoided mainly because (a) there would have been really serious safety problems at interchanges between operators, and (b) LU lacked a commercially robust equivalent of BR ORCATS to allocate revenue to sections of line. LU also took our (BR) advice on how to escape, the gist of which was to shoot the government fox by as much outsourcing as possible, thus stripping out any contractual red meat before the Treasury could get their hands on it.

GH

It's been confirmed that Virgin/Stagecoach have lost the WCML franchise bid. Branson says he's worried First Group have overbid and will have to pull out or face bankruptcy, with the ensuing costs associated with livery, branding, HR etc.
Could this be related to HS2 which is planned as competition to some major WCML destinations? Who knows? I smell a rat, anyway.

While Virgin are not the best operators out there, my experience of them has been better than my experience of First by some margin.
The only potential positive I can see is that if they do go under it might be the wake up call needed to show that the franchising system is not fit for purpose. I wouldn't put money on it though

They all had Barbie Dolls rather than a train set when they were little boys!

XF

I suspect that the Tube PPP got so much traction under New Labour was that right at the outset in 1997 Brown was dictating domestic policy as Blair was so obsessed with strutting on the international stage, and Brown bought the Treasury line completely; indeed, it seemed so often that there had been no real change at all there despite the 1997 election; if anything the Treasury became even more dominant.

GH