Renationalisation is not the answer

Embargoed: 00:01 2nd January 2019

With rail fares due to increase yet again today, and the debate around public ownership raging, it is clear that renationalisation is not the answer.

Despite claims made about our privatised rail network:

  • Two thirds of delays are caused by Network Rail, which is nationalised.
  • Every year of privatisation, bar two, have shown an increase in the number of passenger journeys.
  • Passenger satisfaction is high and stands at 81 per cent, up from 74 per cent 15 years ago.
  • As a proportion of passenger fare receipts, dividends have averaged less than 3 per cent in recent years.
  • In addition, the government has received a net contribution from train operating companies for eight years running. This has totalled £3.4 billion in real terms.
  • More choice on routes is proven to be good for consumers, brings down costs and delivers lowers prices. Competitive routes, such as on the East Coast line where Grand Central operates, has delivered this.

Significantly lower fares could only be delivered by spending yet more taxpayer cash which would disproportionately benefit high earners: the top fifth of households travel four times as far by rail than those in the bottom 20 per cent. It would be deeply unfair for poorer taxpayers to further subsidise wealthier commuters' rail journeys.

Commenting on the report, John O'Connell, Chief Executive at the TaxPayers' Alliance, said:

"We hear from socialists that renationalisation is the silver bullet to improve the railways, but the evidence clearly says not. Network Rail, the state-run part of the railways, is the chief culprit for causing commuters misery.

“As well as introducing more competition, efforts should be spent on ending the disruption of trade unions, as well as scrapping the true rail scandal in this country, which is HS2."

 

TPA spokesmen are available for live and pre-recorded broadcast interviews via 07795 084 113 (no texts)

Media contact:

Chloe Westley
Campaign Manager, TaxPayers' Alliance
chloe.westley@taxpayersalliance.com
24-hour media hotline: 07795 084 113 (no texts)

  1. Founded in 2004 by Matthew Elliott and Andrew Allum, and now with 80,000 supporters, the TaxPayers’ Alliance (TPA) fights to reform taxes, reduce spending and protect taxpayers. Find out more about the TaxPayers' Alliance at www.taxpayersalliance.com.

  2. TaxPayers' Alliance's advisory council

  3. The Office of Rail and Road’s announcement last month that new open access operators would be allowed to bid for slots on existing franchises is good news for passengers and should be welcomed. Two of the existing open access operators, Grand Central and Hull Trains, have been shown to deliver benefits of lowers fares, improvement to service levels and growth in the rail market. A third open access company, Heathrow Express, consistently shows some of the highest passenger satisfaction levels in the country. 

  4. Econometric analysis has shown that, under a number of different scenarios, greater use of open access can reduce the operation costs of services on East and West coast services. 

  5. Net contribution to government from train operating companies is derived from the Office for Rail and Road (Government support to the rail industry – Table 1.6). Central government grants prior to 2017-18 adjusted using the October 2018 GDP Deflators.