Some time ago I wrote to the journalist Christian Wolmar pointing out the error of his ways . He was kind enough to reply. I then replied to him but what with the fall out from the Potters Bar crash he didn't get around to replying. Still, this is what I wrote:
"...since the railways are subsidised..." This, of course, is the thing I baulk at - I would rather that there were no subsidy and hence that the state would not have to involve itself in railways at all. I once calculated (and of course I have forgotten how I did it) that 70% of the subsidy goes to franchises that account for only 25% of the passenger miles. And that is not to say that if the subsidy were removed that 25% of the passenger miles would disappear at a stroke. I would have thought that there are all sorts of commuting services around Manchester, Leeds and Glasgow that could be viable. These may well account for a disproportionate amount of the 25%.
It seems to me that subsidy is a nightmare now, has been in the past and is a nightmare abroad just as much as it is here. No one seems to do it particularly well. In France it is hugely expensive. In the US it is also hugely expensive and on the regional railways in Japan it causes no end of local rows.
I think I know the reason. The problem is that railways are long term and politics is short term. Railways have (at least) a 20 year cycle of investment. Politics, on the other hand runs on 4-year electoral cycles and the general economic cycle - which has a habit of tripping politicians just when they don't expect it (usually when the finishing touches have been put to a CrossRail proposal).
Politicians want results quickly. There is no point in putting up the money for a project that won't see the light of day for another 7 or 8 years. Where are the votes in that? On railways there are almost no quick wins. I am struck by the Japanese experience. There they have spent decades getting all the little things right. Identifying the problems, analysing them, proposing solutions, implementing solutions and monitoring progress. And then repeating the cycle. If only our railwaymen had the space and time to do that. I find it remarkable that the Labour government that knew perfectly well that it would be in for 10 years managed to blow the opportunity so completely. If Blair can't plan for the long term - what politician can?
Contrast this political short-termism with the entrepreneurial long-termism of people like Stephenson, Brunel, Watkin or even Andrew Gritten of Central Railway.
Having said that, I accept that for the time being subsidy exists. How should it be done? I think the best approach is to separate the viable parts of the network from the unviable parts. This is more or less what they have done in Japan. The advantage of this approach is that you can allow the viable parts to get on with the business of running railways unmolested by government interference.
So what do you do with what's left? My best guess is that local governments should be allowed to own or subsidise whatever they like. At very least it will allow local people to assess whether X rail link really does offer value for money.
So far I have only considered subsidy as a means of keeping open otherwise bankrupt lines. Subsidy is also used to lower fares and to fund big projects eg. WCRM.
I am not a big fan of artificially low fares. We know what the effect is on the London commuter market: overcrowding leading to delays. What is less well known is their effect on the investment market. When prices rise this sends out a signal that there is a demand not being satisfied. This encourages either new suppliers to enter the market or existing suppliers to increase capacity. When prices are held down this signal is not sent out.
I am also extremely dubious about grand projets. Don't get me wrong, I think the TGV is magnificent and I am sure the same applies to the Shinkansen. But are they really the best use of the billions spent on them?