Letter in The Economist

24th October 2015 | Media Coverage / News

A letter from Bring Back British Rail campaigner Oliver Lewis is published in this week’s The Economist. Read the full text below.

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The train takes the strain

The Labour Party does not go far enough in its plans to renationalise Britain’s railways (“Gravy trains”, October 3rd). As you noted, attaining rail re-nationalisation by allowing franchises to lapse will take more than a decade. Instead a new bill, a Railways Act 2020, should be passed by Parliament to terminate the franchises. The bill might consider re-establishing British Rail’s passenger businesses, which were fragmented into 25 separate entities by privatisation.

Among them was Intercity, which operated high-speed trains, and Network South East, London’s commuter service. Policymakers have been reluctant to acknowledge the cost to the taxpayer and the British economy of rail privatisation. That amnesia ignores the remarkable performance of these two businesses: in 1993-94, both made an operating profit and did not require a penny of public subsidy.

Oliver Lewis

Bring Back British Rail
oliver@bringbackbritishrail.org

Letter in Financial Times

24th August 2015 | Media Coverage / News

A letter from Bring Back British Rail campaigner Oliver Lewis is published in the Financial Times today. Read the full text below.

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Economic analysis exposes ultimate flaw in present arrangement for railways

Sir, John Kay’s very positive portrayal of the benefits of rail privatisation (August 19) is incorrect on three counts.

First, the demand for rail transport is a derived demand of economic growth in an economy as a whole. Rail patronage has risen substantially since 1995, but the economy is also 60 per cent larger in real terms (even with the 2007-08 crash). Had he reviewed British Rail’s passenger numbers, he would have noticed that the revival of the industry began in the mid-1980s as the Lawson Boom gave rise to a greater need for transport services. Passenger numbers fell in the recession of the early 1990s, and then rose substantially as the economy returned to growth. Using 1995 as a reference point, at the start of 14 long years of expansion in gross domestic product, is misleading.

He also misses the raison d’être of rail privatisation, and why we suspect so many Conservative voters support the policy. In a cross-departmental paper outlining options for rail privatisation published in 1992, New Opportunities for the Railways emphasised the view of HM Treasury that the option chosen must not include a perpetual public subsidy — the same subsidy that British Rail reduced in the late 1980s following its business sector-led reorganisation, reaching an all-time historic low in 1990-91. To take accounting year 2007-08, the public subsidy to the industry was three times as much (in real terms) as that received in the last full year of British Rail management. Privatisation has manifestly failed to reduce the railways’ capacity to absorb public money.

Simple economic analysis also exposes the ultimate flaw of the present structure. As the economy has expanded it is true to say the number of people travelling by train has risen; as a consequence average costs per passenger should have fallen drastically, and the public subsidy too. As illustrated by the coalition government’s own report into the problems with our railways, the McNulty report published in 2011, average costs per passenger have risen substantially. This is very unusual, to say the least, in an industry with such vast fixed costs: the marginal cost of carrying one, or even 1,000, extra passengers is close to zero.

Oliver Lewis

Bring Back British Rail
oliver@bringbackbritishrail.org

BBC Radio 5 Live Debate

20th August 2015 | Media Coverage / News

Campaign founder Ellie Harrison was interviewed live for an episode of “The Explainer” on BBC Radio 5 Live’s Daily Show exploring different aspects of the re-nationalisation of the railways debate. The show was hosted by Chris Warburton (Chapter 1) with four guests: James Abbott from Modern Railways Magazine (Chapter 2), Ellie Harrison from Bring Back British Rail (Chapter 3), Richard Wellings from Institute of Economic Affairs and Marcel Krüger an author from Berlin.