Tuesday, August 28, 2012

Virgin on the ridiculous

I was standing in a jam-packed Chiltern Railways train to London the day Virgin lost its franchise torun the West Coast Main Line.

I wasn't travelling on Sir Richard Branson's route because it is too expensive. Though, to be fair, they usually have enough seats to go round.

When an elderly lady joined the train at Banbury I felt obliged to give up my seat even though the carriage was full of texting teenagers.

There was also one youth hogging two seats – one for his expansive posterior, the other for his expensive guitar.

He didn't have a ticket for his musical instrument (I asked) and refused to shift it. Naturally the railway staff steered clear of our train, where at least a dozen passengers were standing in my coach alone.

Such is life on Britain's railways.

Yet rail travel is at its most popular since the golden age of steam in the 1920s, despite the high fares.

It's a strange business, though: part public service, part profitable enterprise.

Weep no tears for Sir Richard Branson as he rages over losing the West Coast Main Line franchise. The service wasn't particularly good and it was astonishingly expensive.

Our railways are there for capitalists like Sir Richard to exploit. Squeeze as much cash as they can out the passengers and gullible Governments and walk away if things go wrong.

That's what happened on the East Coast Main Line where National Express, promising to pay£1.4 billion to the Government, soon handed back the keys because it couldn't make a profit.

Sir Richard claims FirstGroup has over-bid for the West Coast line, won't be able to meet its obligations and its service will eventually hit the buffers.

FirstGroup says it will pay the Government £13.3 billion or so over the 16-year life of the franchise compared with Virgin's best offer of £11 billion.

Sir Richard's career has been sustained on a diet of sour grapes so we needn't take his moans too seriously.

But the episode does reveal once again how bizarre our railway business has become.

When British Rail was privatised, the Government offered franchises to run different routes.

But the infrastructure all owned by a separate company, Railtrack, which was scandalously nationalised in 2002 and became Network Rail.

This system doesn't make any sense. Railway companies should be responsible for the whole travelling experience from safety to sandwiches.

Instead of raffling off its most important railway line on the off-chance it will bring in a few billion quid over a decade and a half, the Government should sell the West Coast line completely.

Let Virgin or FirstGroup or some other entrepreneurial business take on the whole thing –track, stations, signals, trains, services, the lot.

At the same time, it should scrap all controls over the cost of travelling by train and encourage more competition.

At the moment, fares rise according to Government decree and taxpayers subsidise the entire system by about £4 billion a year.

Incredibly, this is – after inflation – four times as much as we used to spend in the bad old British Rail era.

To reduce its subsidy the Government has decreed fares must rise by 6.2 per cent next year. Some commuters will see their fares rise 11 per cent or more.

This has caused the usual outcry but it's actually a very good thing. There can be no sense in a two-way traffic in money between the Government and the rail companies.

More to the point, most of the price controls are imposed to keep down the cost of commuting in and out of London which, of all the places in Britain, does not need a commuter subsidy.

Nobody is forced to work in Londonyet they get paid extra for this dubious privilege.

Commuters should pay the full, hideous price of travelling to the office instead of expecting the rest of us to subsidise London's workforce.

An end to rail subsidies in the South East would benefit the rest of Britain by persuading employers, and their staff, there are better places to live and work.

Commuting into London is an unpleasant experience which involves standing in a sweaty coach with your nose pressed up against someone else's arm-pit as the train lurches, jerks and sways from station to station.

Of course with so many Tory MPs in the South East and London Mayor Boris Johnson now the most popular politician in the country, we can expect a battle to protect these subsidies.

But it can’t possibly make sense for the taxpayer to pay for London’s commuters.

This doesn’t resolve the basic problem of flogging off franchises in the hope the winners will actually deliver the revenue they’re promising the Treasury.

We need real rail reform. The alternative is a system lurching from one crisis to the next.

And there is something bizarre about the fact that, as revenge, Sir Richard is planning to introduce flights from Manchester to London for £95 – about £200 and two hours less than the second class rail fare.

Perhaps he'd like to try a service from Halfpenny Green as well.

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