UK Politics General Discussion

Today, it would seem that Labour’s first rail operator has been renationalised in the form of South Western Railway… and the first service was a rail replacement bus: https://www.bbc.co.uk/news/articles/cy90x5p2gn3o

As there are some evidently politically minded folks here; would someone mind explaining to me what renationalising the trains will actually achieve other than bringing everything under state control? What will it achieve for the consumer?

There’s strong support for the idea, but I also keep hearing about how dreadful British Rail was…

Matt N said:

As there are some evidently politically minded folks here; would someone mind explaining to me what renationalising the trains will actually achieve other than bringing everything under state control? What will it achieve for the consumer?

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The privatisation state of affairs works like this:

A TOC (train operating company) bids for a franchise. They pitch to the government the service that they're going to provide, and how much they're willing to pay the government to run the franchise. The TOC will make its money back from selling tickets, running railway stations, renting out concessions and upselling in other areas.

Theoretically, privatisation is supposed to make things cheaper, better and more efficient for the consumer, due to competition.

There is no competition once the franchise has been awarded. In most cases only one TOC has a monopoly over services in an area / on a line for a fixed period of time.

The TOC, being a private entity, has a duty to generate a profit for its shareholders. It has spent an awful lot of money to gain the franchise, it doesn't have much control over how much they can inflate their ticket prices each year (they'll do as much as they can), so the only profits to be made are in "efficiencies". Fewer services, fewer staff, less maintenance, anything which they don't have to offer or deliver (as legally mandated) is scrapped to ensure that a profit can be made.

This is the paradox of the middle man.

Nationalising TOCs strips away a lot of this. There is no expensive franchising bidding war. There is not a requirement to deliver a profitable service over a quality service.

The trade off is a larger government, with ultimate responsibility, no one else to blame and the private sector not getting much of a look in.

Matt N said:

There’s strong support for the idea, but I also keep hearing about how dreadful British Rail was…

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Most likely from, or funded by, sources with private interests in keeping the status quo.

Even Thatcher thought that privatising rail was a privatisation too far, and one which wouldn't work.

The idea is to cut out the middle man who's currently taking a profit. By taking out this profit margain the idea is to use the money for improvements, and less rise in rail faires (and hopefully a reducation, although the gov are staying quiet on this at the moment). This is going to be a long process though as they are waiting for each train operators franchise to run out, then taking it back.

JAperson said:

The idea is to cut out the middle man who's currently taking a profit. By taking out this profit margain the idea is to use the money for improvements, and less rise in rail faires (and hopefully a reducation, although the gov are staying quiet on this at the moment). This is going to be a long process though as they are waiting for each train operators franchise to run out, then taking it back.

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7 large TOCs however, are due to be re nationalised in 2027, that is not too far off.

I would argue that the ROSCOs (Train Leasing Companies) are also an ugly, and also arguably hidden, symptom of 1990s privatisation which is sadly but understandably not being addressed in this nationalisation plan.

They earn huge dividends each year from leasing out the trains to the operating companies at prices which are much more expensive in the long term compared to buying initially, and these dividends are naturally passed onto shareholders. Take this Guardian Article from last year, which highlights how, while fares were going up and unions were striking, these companies were making huge profits.

(apologies for the web archive link, I just refuse to use a news site where you need to 'reject and pay' for cookies)
http://web.archive.org/web/20240317...-private-train-leasing-firms-treble-in-a-year

The ORR said the rolling stock companies, or ROSCOs, paid dividends of £409.7m in 2022-23, up from £122.3m a year before. Their net profit margins went up from 14.3% to 41.6%.

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41.6% is a huge profit margin to have which must have come from somewhere - i.e the consumer and the ticket prices they are charged (as well as a huge range of other factors).

Train operators’ contracts are now structured for the government to make up the shortfall between revenue and costs, meaning taxpayers are now effectively paying the £3.1bn spent last year on leasing trains, almost a quarter of total industry costs.

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To add even more insult to injury, if there is a shortfall between what was the expected revenue and costs to the TOC of using leased stock, the government contractually must pay this shortfall using taxpayer money. £3.1 billion is quite a lot of money!

(Admittedly this data is now approaching two years old already, however this is in no shape or form a new phenomenon and has existed right from the start of privatisation).

While, yes, their existence does remove the liability to the TOC of maintenance and mishaps (see the TPE Mk5 Coach fiasco), and without their existence some may argue that we wouldn't have the large plethora of stock introduced since BR privatisation (there is no real incentive for a short term franchisee to introduce stock), this in no way outweighs the immense profits taken from the rail industry into the private sector.


Nevertheless, they are unfortunately not going nowhere anytime soon, simply because of the huge cost & compensation it would require to acquire all assets of the ROSCOs (many of which ironically used to be government owned under British Rail), and the government just can't afford to do that politically or financially at the moment.
The only realistic way I see of them going is a slow process where new stock is bought outright and owned publicly rather than leased from a ROSCO; we've already seen a few examples of this such as the Merseyrail 777s being leased from 'Merseytravel' (regional public operator), and the TfL class 345s (which didn't last very long as they were very quickly sold and leased back to free up cash!)

If anyone is interested here is a report from the ORR in 2015 about the costs associated with ROSCOs.
https://www.orr.gov.uk/sites/default/files/om/understanding-the-rolling-stock-costs-of-uk-tocs.pdf

I use SWT and we have Rail Replacement today from my local station. Assume it is engineering works on the track.

The issue with the franchises is that the Govt couldn't negotiate or structure them due to incompetence (all parties in Govt). How will running the trains be any easier???

Nice to see Reform smashing the British political system by coming third in a by election and losing their chairman on the same day on an issue of race.

Top notch stuff.

The nasty racists in business suits continue to entertain.

Edit...early morning Reform stalking...didn't know 'mingo were donors.

Those right wing park owners, eh.

rob666 said:

Edit...early morning Reform stalking...didn't know 'mingo were donors.

Those right wing park owners, eh.

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So they are. That's them off my visit list, which is a pity.

Mingo been right wing for years. The posh part of Yorkshire always feels very stuck up.

rob666 said:

Nice to see Reform smashing the British political system by coming third in a by election and losing their chairman on the same day on an issue of race.

Top notch stuff.

The nasty racists in business suits continue to entertain.

Edit...early morning Reform stalking...didn't know 'mingo were donors.

Those right wing park owners, eh.

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This is the thing with populists fantasists. Whilst people get all excited pretending that Reform UK Ltd are the next big thing, fuelled by quite absurdly disproportionate media coverage and political commentary, it doesn't take long for reality to set in. Surprise surprise, Reform are pretty much UKIP 2.0. Who would have seen this coming!

Yes, their rise has been eye watering. Yes, the failure of established political movements to modernise are fundamental ingredients to this. But Reforms highly exaggerated success has foundations made of paper. It's core vote is made up of knuckle draggers, racists, ignorant hooligans, and a handful of wealthy individuals pulling strings to protect their riches. The rest, and the key to recent successes and opinion poll highs, is made up of protest voters, many of which will openly admit that the party is crazy and they're only being chosen to send messages.

Beyond flat taxes and extreme neo-liberalism, there is no core ideology or value set. It's a company set up to protect the rich. It's unsustainably reliant on Farage's personal brand vanity, shape shifts policies to draw people in with no ideological substance behind any of them, and even the foreigner bashing is just a fishing hook.

Although there may be some endurance throughout this parliament, the speed in which the inevitable reality seems to be unraveling has surpassed my expectations recently.

As with UKIP, it's not taking long for the underbelly to start revealing itself, leading to the chairman buggering off in protest after an MP makes a rediclous and pointless burkha ban comment. This is hot on the heels of one of their few MP's being suspended following a fallout with Farage only a few months after being elected. Also slowly unravelling just weeks after gaining council power is the truth that local councils can't do anything about migration, and that cutting diversity programmes and rainbow lanyards doesn't provide enough cash to stop council tax from rising. A Reform councillor has declared that children in care are "not just naughty, but downright evil". Tories are starting to flood the party, so much for all those economically left lies last week then? In a parliamentary test, it turns out that 2 unpopular parties, one running the UK government, the other the Scottish government, can kick Reform into third place.

Sit back and enjoy the fireworks. As with anything Farage attaches his ego to, the implosion is going to be great to watch as it unfolds.

Benzin said:

Mingo been right wing for years. The posh part of Yorkshire always feels very stuck up.

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I can empathise, just about, with light right. I can tolerate a Tory. I just can't get behind those who back nasty parties.

Do you think the Tories will let the nice ex Reform chairman back in, now he has quit the old job?
He didn't actually choose to leave the Tory party, they kicked him out when the Guardian pointed out he was still a Tory party member!

It would appear as though it’s been a tough week for the PM. Some are calling it the worst week of his premiership so far.

Faced with the potential for a considerable Labour rebellion on the planned changes to benefits, Starmer performed a u-turn. As I understand it, the bill was changed to ensure that only new claimants of benefits would be hit by the planned cuts, and another amendment was made at the eleventh hour stating that no changes would be made to PIP eligibility until disability groups had been consulted.

Regardless, 49 Labour MPs still voted against the bill last night, and it would seem as though much of the planned £5bn financial saving from the reforms has now been wiped out. When this is combined with the reversal of winter fuel payment changes, this now leaves a £5bn black hole for Rachel Reeves to fill in the Autumn Budget.

In a contentious PMQs, Starmer refused to commit to keeping Rachel Reeves on board as Chancellor until the next election, while Reeves herself appeared tearful while sat next to Starmer. Kemi Badenoch picked up on this and referred to the Chancellor as a “human shield for [Starmer’s] incompetence” and asked whether the Chancellor would be kept on board.

I’ll admit I can’t quite decide whether these u-turns make Starmer look pragmatic and willing to take feedback on board or weak and spineless. I’d like to think the former, but I fear that the backdrop of staving off a huge Labour rebellion will lead many to conclude the latter.

I do think the unavoidable truth is that taxes will need to rise if we want to avoid benefit and services cuts at this point, however. The money needs to come from somewhere, and I honestly think tax rises might be less politically toxic at this point than some of the other changes proposed by Starmer and Reeves.

Starmer may as well resign really if they can't get their own main policies through.

I'm not even sure I'd class what Starmer did as a U-Turn, that would suggest we were back where we started, which we are not. In fact, the changes proposed looks like ploughing on regardless and an attempt to simply remove the face of the victims of the cuts.

In the previous version of this bill, affecting current claimants, the victims of the cuts could be interviewed on TV and show the faces of those who would be loosing a vital lifeline. In the change proposed to the bill, it would still be that people would still lose out on this lifeline, but can't be interviewed on the topic because they are not yet born, or have not yet ended up in life changing situations that have rendered them disabled.

Anyone in society could become a victim of these cuts, but has no way to know it yet.

Four years to a general election.
Democratically elected politicians enforcing the feelings of their constituents on government within parliament.
Tory press making a meal of it...with four years to go to the election.
Increases in taxation that should have been done a few years ago to cover the incredible cost of covid are finally happening.
All we need now are decent progressive new taxes to pay for it all.

Budget's sorted. The PM has "full confidence" in Reeves, meaning she'll be out by the end of the week. Bring in a new Chancellor who DOESN'T have to stick to Reeves "red lines" and fiscal rules, and there's no back-track, no U-turn and no problem.

That's why the UK bond market has seen a big sell-off and the 10-year yield increase - they expect/worry of a new chancellor with different rules about borrowing and tax increases. Of course don't take my word for it... wait until next week

If they sack Rachel Reeves now, this government will have wasted all of its political capital on a chancellor that just about spent a year in the role. I think they’ll switch her, and potentially Starmer too shortly before a General Election.

There’s quite a few figures in the Labour Party at the moment that are gaining momentum and could recover some of Labour’s popularity to wade off Reform at the next general election. There’s figures like Angela Rayner and Andy Burnham that could go for Party Leader/Prime Minister where their reputation hasn’t been tarnished by this government, and are more ideologically cohesive, one of the major pitfalls of this government.

There’s also figures like Wes Streeting that would also run but I don’t think the public or Labour membership would have much appetite for a continuity Starmer candidate.

I still think this government can steady the ship, and are somewhat immune to unpopularity. The Labour Party need a vision if they want a second term though, they need to carry the argument of this discontent right now. Labour is probably the only political juggernaut right now that would be open to a coalition government as well, which would help if we got yet another hung parliament next election. This is not the same situation as the last Conservative government by a long shot.

Wes Streeting as PM is a Labour a number definitely wouldn't vote for. Myself included.

This is probably a controversial view, but I dare say that Starmer denounced Corbynism too quickly upon taking the Labour leadership.

I’m not saying that I agree with everything Corbyn stood for by any stretch (I think he probably sits further left than where I would place myself, if I had to pick), and I’m not saying that it wasn’t right to move away from Corbyn, but I do feel that Starmer was maybe too quick to denounce all aspects of Corbynism and try and do the complete opposite to Jeremy Corbyn in every sense.

As unpopular as Jeremy Corbyn was by the end, he was briefly very popular and was the only Labour leader since Blair to ever manage 40% of the vote. He played a considerable role in denying Theresa May a majority in 2017. I think there were some legitimately good and popular ideas within Corbyn’s political project, and whatever you think of him, you have to admit that Corbyn stood for change of the sort that many people are crying out for. I also feel that Corbyn’s unpopularity was not helped by some of his own more extreme far left stances and personal baggage as opposed to the manifesto he ran with. If some of the same pledges were presented by a less extreme and controversial individual, I do think they’d score better with the wider electorate.

Indeed, when Starmer himself ran for the leadership, he did so on a surprisingly left-wing platform. But he quickly seemed to abandon this when he won the leadership.

If Starmer or a different leader were to look back at that period, reflect on some of the things that worked in Corbyn’s campaigns and use them, I do feel they would go down well with the electorate.