15 June 2007
Alex Singleton. Communist
Patrick Crozier

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Alex appears in the top part of this image
My good friend, Alex Singleton, writing for the Globalisation Institute, has been singing the praises of British rail “privatisation”.

Yup, scare quotes.  They’re there for a reason.

To privatise means to alter the ownership of an institution from the state to the private sector.  To own means to control.  In the economic sphere it means to be able to decide what you sell, to whom you sell it and at what price.

On privatisation, Railtrack was supposed to “own” the infrastructure - the tracks, the stations, the control centres.  The main services it had to sell were what are known as track “paths”.  Could it decide how many of these to sell?  Not really, that was decided by the government in the form of the Rail Regulator.  Could it decide to whom to sell them?  No.  That too, was decided by the Rail Regulator.  Could it decide at what price to sell these paths?  In almost all circumstances, no.  That, again, was decided by the Rail Regulator.

We have a term for a system where the government decides everything.  It is known as communism.  And Alex Singleton (at least, when it comes to the railways) is in favour of it.

And, just like communism in every other sphere, it doesn’t work.

Feedback

  1. What I was saying is that empirically the railways improved after privatisation, or “privatisation” as you call it. Of course, I agree the regulatory side of things was a mess, in part because of the government’s constant changes to the regulatory system. But like other network-based privatisations, e.g. telecoms, as competition increases, there’s scope to argue that the regulator’s role should diminish. OFCOM doesn’t regulate consumer phone charges any longer. It’s why companies like Hull Trains and Grand Central, which don’t run francises but compete against franchise holders, are such good things.

    Posted by Alex Singleton on  15 June 2007 at 11:00 am

  2. We seem to be forgetting about the subsidy: £5-6-7bn (or whatever it is a year) plays £1bn (or maybe £2bn allowing for inflation.

    This completely outweighs any benefit that we may derive from Hull Trains’s 8 trains a day or whatever it is.

    And this is to ignore the costs of the whole open access operation.  There are the direct costs of the whole bureaucratic operation.  But there are others. One wonders how many times GNER may have been thinking of tinkering around with the timetable only to be reminded that: “Oh, we can’t do that because the Hull Trains service gets in the way”.

    Vertical fragmentation doesn’t work.

    Posted by Patrick Crozier on  15 June 2007 at 02:26 pm

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