Michelle Reynolds Podiatrist, Marple

Author Topic: Local elections  (Read 51971 times)

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Franz

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Re: Local elections
« Reply #155 on: June 27, 2014, 03:36:40 PM »
there are two separate elements in the way the government subsidises rail services.  There is the direct subsidy to the train operating companies, which is shown net of any premium which they may have paid.  And there is their portion of the grant which the government pays directly to Network Rail for providing the track and other infrastructure. 
Oh dear Dave, and I thought I had made it simple. I don’t know whether you don’t understand or whether you are bending the facts to fit your idealogical position. I will try very hard to make it clear.

Your statement quoted above is absolutely correct. What you do not go on to say, however, is that the direct subsidy to the train operating companies in 2012/13 was a negative, -£968,100,000. In other words, the premium paid by the TOCs to the taxpayer exceeded their subsidy by that amount. The government paid nothing to the TOCs for running the trains, the TOCs paid the taxpayer for the privilege. (The results do vary as between the different TOCs but the figure quoted represents the sum of their efforts)

East Coast contributed £190 million towards this payment, an amount almost equalled by First Capital Collect, exceeded by Southern and completely outstripped by South West Trains, all of which presumably paid dividends to their share holders as well. I have no idea what East Coast paid in financing costs, which might have been paid out as dividends had they been privatised.

This £968 million which the TOCs paid to the government was, of course, available to offset the subsidy of £3.2 billion paid by the government to the nationalised Network Rail

The taxpayer and/or the government bond holder does subsidise the rail industry but that subsidy goes to that part of the industry that is nationalised which is further subsidised by that part of the industry that is privatised.

Please try not to let ideology get in the way of the facts


Dave

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Re: Local elections
« Reply #154 on: June 27, 2014, 10:29:35 AM »
I don’t think you need to speak for the unions, Dave, they can speak for themselves.

I don't speak for any trade unions, I speak for the taxpayer, who in 2012-13 made £5.9 million in profits from Directly Operated Railways, the holding company set up by the government to run the East Coast Main Line franchise after National Express pulled out five years ago.  That is money which in the case of other train operating companies goes to shareholders.

In the UK the government pays nothing towards the cost of running the trains. Overall this cost is met entirely by the Train Operating Companies (TOCs). The government funding of £4 billion (in 2012/13) accounted for 66% of the cost of maintaining the network infrastructure, the remaining 34%, or
£2 billion, also being paid by the TOC’s.

It is not the case that 'in the UK the government pays nothing towards the cost of running the trains.'  But it is complicated and I can understand why Franz is confused, so let me explain.  As this well-worn but useful web page shows:  https://www.gov.uk/government/publications/rail-subsidy-per-passenger-mile  ..there are two separate elements in the way the government subsidises rail services.  There is the direct subsidy to the train operating companies, which is shown net of any premium which they may have paid.  And there is their portion of the grant which the government pays directly to Network Rail for providing the track and other infrastructure. 

As for this: 
an historically good low cost train line is operating at a slightly lower subsidy than some franchises

... 0.5p per mile is 1.25% of 40p per mile.  It's the first time I've ever heard 1.25% described as 'slightly lower!'   :D

Duke is right, however, about the East Coast Main Line being historically good and low cost.  What went wrong, however, was that an ill-judged tender by National Express proved unsustainable, due to the unrealistic expectations of the company's incompetent management.  An efficiently managed company has now taken over, and is doing very well, and returning profits to us taxpayers.  Duke doesn't like that, however, because his 'ideology is getting in the way of logic'   ;)

Franz

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Re: Local elections
« Reply #153 on: June 27, 2014, 06:37:04 AM »
I can't speak for the trade unions. 
I don’t think you need to speak for the unions, Dave, they can speak for themselves.

So privatisation is unsatisfactory but we can’t go back to nationalisation, so what is the solution? Scottish independence would help as the government funding accounts for 61% of the cost of running the railway in Scotland and 31% in England.

In the UK the government pays nothing towards the cost of running the trains. Overall this cost is met entirely by the Train Operating Companies (TOCs). The government funding of £4 billion (in 2012/13) accounted for 66% of the cost of maintaining the network infrastructure, the remaining 34%, or
£2 billion, also being paid by the TOC’s.

Network Rail, which is responsible for the infrastructure, has no shareholders and pays no dividends, is a statutory corporation formed by the government when they forced Railtrack into bankruptcy so that they could acquire its assets for 20% of their pre bankruptcy market valuation and also to avoid adding their then liabilities of £30 billion to the National Debt. Despite this the National Audit Office has always been adamant that the company is, prima facie, nationalised and they appear to have won the day as the government are now forced by EU Accounting Standards to classify Network Rail as a government body and add their debts (now a staggering £140 billion ) to the National Debt. A gift from nationalisation to the lucky old taxpayers of our children’s and grandchildren’s generations!

The governments subsidy to the rail industry of £4billion contributes to the cost of developing and maintaining the infrastructure. Perhaps the government feels that it would be unreasonable to expect the passengers to cover the cost of this nationalised operation.

What is particularly interesting is that, although Network Rail pays no dividend, 25% of its total costs, ie £1.5 billion was, in 2012/13 spent on “financing costs”. Like all companies Network Rail needs capital and whoever supplies the capital expects a profit. That’s a rather emotive word for some so lets call it a “return on capital” instead. The TOCs obtain at least part of their capital from shareholders and they expect their return which comes in the form of a dividend. The railways will still require capital if they are renationalised and where will it come from? Not the taxpayers as this would require increased taxation or a reallocation of priorities. No, it will almost certainly come from government borrowing and the Chinese and Middle Eastern buyers of the government bonds will require their pound of flesh. So dividends paid to shareholders will be replaced by interest paid to bondholders. In addition the government will persuade foreign state funds to invest in specific infrastructure projects as seems likely in the case of HS2. So, the HS2 infrastructure will belong to the state, or taxpayer and, while dividends will not be an issue, vast amounts of interest will be paid to overseas financiers. Not a lot of difference in principle to Deutsche Bahn’s ownership of much of our rail freight business except that the German government will eventually be forced by EU regulations to sell its majority shareholding.

So much for the interest of the taxpayer, what about the passenger? The latest National Passenger Survey shows that just 6% of the 26677 passengers surveyed across the country were dissatisfied with the service. That seems remarkable and I wonder what it would have been prior to privatisation. This is achieved by management highly motivated by the benefit to their own shareholdings, by their salaries, and by their bonuses. What would be the motivation for the state employees?

The “East Coast” argument is interesting. As far as passengers are concerned, Virgin have an almost identical satisfaction rate although Virgin have shown better progress since Spring 2012 when 17% of their passengers were dissatisfied as opposed to 10% on East Coast. Presumably Virgin were still reeling from the effects of the disastrous performance of the nationalised infrastructure company in relation to the West Coast upgrade and the appalling mismanagement of track occupations.

As far as financial performance is concerned, East Coasts results in relation to subsidies looks impressive but it would be interesting to look at the detail. How do Virgin and East Coast track access charges and payments to their ROSCOs compare? How do East Coast finance their operation? Perhaps one day I will have time to find out although I suspect that the argument would still continue ad infinitum.

I  agree with you, Barbara, in relation to our local rolling stock. It’s called cascading. The south east get the shiny new trains and pass their 15/20 year old stock on to the Midlands who pass their 25/30 year old stock up North. However, with regard to the cost of fares it is not just seniors who benefit from Virgin’s progressive and easy to operate (provided you have access to a computer) ticketing system. There are ten other railcards which provide discounts and, even if you are one of the estimated 33% who are unable to access a railcard, you can still get to Euston and back for £25.

Duke Fame

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Re: Local elections
« Reply #152 on: June 26, 2014, 12:24:35 PM »
I'm well aware that three of the 16 rail operating companies receive a lower subsidy than East Coast, and I never said otherwise.  What I said was:   
If Duke had read my post properly he would have noticed that I referred to 'one of the lowest subsidies'.  But of course, he wasn't paying attention, preferring to rely on a combination of knocking down a 'straw man', and his tried and trusted fallback of waffle, waffle and more waffle!   ::)

Dave, Dave, Dave so what you are saying is that an historically good low cost train line is operating at a slightly lower subsidy than some franchises but slightly more than others. That's not really a compelling case to for state ownership in trains.

Ideology is, as ever, getting in the way of logic.


Dave

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Re: Local elections
« Reply #151 on: June 26, 2014, 09:39:58 AM »
Read it carefully? Dave, if you look carefully you may find 3 companies where the subsidy per passenger mile is less.

I'm well aware that three of the 16 rail operating companies receive a lower subsidy than East Coast, and I never said otherwise.  What I said was: 
Northern Rail, with the most rubbish rolling stock in the entire country, as Barbara rightly points out, is also the most heavily subsidised, with 40p per passenger mile coming from us taxpayers.....   [whilst] the publicly owned East Coast Main Line receives one of the lowest subsidies, of just 0.5p per passenger mile.

If Duke had read my post properly he would have noticed that I referred to 'one of the lowest subsidies'.  But of course, he wasn't paying attention, preferring to rely on a combination of knocking down a 'straw man', and his tried and trusted fallback of waffle, waffle and more waffle!   ::)

Duke Fame

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Re: Local elections
« Reply #150 on: June 26, 2014, 08:28:23 AM »
I happened to hear Prime Ministers Questions on the car radio today.  I think Duke rivals even David Cameron in his slippery evasiveness!

I think I provided a link in an earlier post, to a government website showing the subsidy per passenger mile of all the UK rail operating companies.   In case I didn't here it is:  https://www.gov.uk/government/publications/rail-subsidy-per-passenger-mile

As Duke will see if he reads it carefully, the figures are a like for like (even apples for apples) comparison, net of any premium which may be payable.  The rest of Duke's waffle is irrelevant.   

Read it carefully? Dave, if you look carefully you may find 3 companies where the subsidy per passenger mile is less.

You also have not taken into consideration the requirement for other franchises to invest and expand services. i.e From privatisation to the end of NXEC, key services between Leeds, London and Newcastle almost doubled, Leeds to Edinburgh 7 fold!. Since State owned, 4 servoces have been removed, NONE added.


Not only do your claims not add up, you are not looking at the bigger picture.

wheels

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Re: Local elections
« Reply #149 on: June 25, 2014, 11:22:39 PM »
Interesting how ideology-driven stuff used to come from the left-wing of politics. These days it's the right who are the ideologues. The "One Nation" Tories were very much about managing the status quo, the mixed economy. These days,driven by the neo-Con agenda from the USA, they cannot see beyond the privatisation of all things, including our dear NHS, which despite promises, is plummeting from hero to zero under this regime. It is now Labour who take a more measured response, and do not fall into the private good, public bad mentality which is putting our society under so much strain.

There is some merit in that but lets not get too dewy eyed over Labour, it was Labour that introduced Tuition Fee it was Labour that developed and extended the market in the NHS and tried to do the same with our transport systems including road tolls


marplerambler

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Re: Local elections
« Reply #148 on: June 25, 2014, 11:09:56 PM »
While you are on the subject of trains, have there been any developments relating to Metro tramtrains replacing Northern Rail on the Marple/Rose Hill line?

Duke Fame

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Re: Local elections
« Reply #147 on: June 25, 2014, 09:00:14 PM »
I happened to hear Prime Ministers Questions on the car radio today.  I think Duke rivals even David Cameron in his slippery evasiveness!

I think I provided a link in an earlier post, to a government website showing the subsidy per passenger mile of all the UK rail operating companies.   In case I didn't here it is:  https://www.gov.uk/government/publications/rail-subsidy-per-passenger-mile

As Duke will see if he reads it carefully, the figures are a like for like (even apples for apples) comparison, net of any premium which may be payable.  The rest of Duke's waffle is irrelevant.   


I happened to listen at work, like the evil Eds, Dave doesn't talk about the economy anymore.

Dave

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Re: Local elections
« Reply #146 on: June 25, 2014, 05:05:41 PM »
I happened to hear Prime Ministers Questions on the car radio today.  I think Duke rivals even David Cameron in his slippery evasiveness!

I think I provided a link in an earlier post, to a government website showing the subsidy per passenger mile of all the UK rail operating companies.   In case I didn't here it is:  https://www.gov.uk/government/publications/rail-subsidy-per-passenger-mile

As Duke will see if he reads it carefully, the figures are a like for like (even apples for apples) comparison, net of any premium which may be payable.  The rest of Duke's waffle is irrelevant.   

Duke Fame

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Re: Local elections
« Reply #145 on: June 25, 2014, 03:57:37 PM »
Me too.  So as we agree for once, let's have another look at these figures:

Come on Duke, even you can work it out.  Which company is 'moving people in the most efficient way possible'?

Not exactly apples and apples Dave.  The main reasons for the East Coast profit being so high were that unlike a normal franchise, they have no obligation or commitment to invest their profits in improvements to the service or infrastructure and they aren't required to pay the government a Premium or fee for being able to operate the franchise. The big failing with National Express is that they overbid for the franchise and anticipated further growth in passenger numbers but that was 2007, the recession started to hit in 2009, passengers fell and income fell, NX could not afford the franchise commitment - without the franchise commitments, EC seem good value to the taxpayer but we've not seen any of the new routes expected from NX, East Coast now run to the 1949 timetable of 2 trains an hour to Leeds and two to Newcastle - the private franchises were expected to deliver 4 services an hour to both cities with new 180 trains. Without the weight of competition hanging over "state owned" companies, inevitably inefficiency and inertia will take a firm grip.

The ECML franchise document requires a whopping increase in services of 50% from 2020, State East Coast has not had this requirement.

To compare like with like you are lucky:

ECML has one of the few sections of UK railway where more than one operator in direct competition, the York to London stretch is served by two High speed train firms, East Coast and Grand Central. Walk-up prices are considerably cheaper on Grand Central, anytime return tickets nearly £130 cheaper than the state company. Journey times are on average quicker on the non-state company (although they don't stop so often)

Dave

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Re: Local elections
« Reply #144 on: June 25, 2014, 02:18:16 PM »
I think you have to ask what a public transport system is supposed to achieve. For me, it's moving more people in the most efficient way possible.

Me too.  So as we agree for once, let's have another look at these figures:

Northern Rail, with the most rubbish rolling stock in the entire country, as Barbara rightly points out, is also the most heavily subsidised, with 40p per passenger mile coming from us taxpayers...... [whilst] the publicly owned East Coast Main Line receives one of the lowest subsidies, of just 0.5p per passenger mile. 

Come on Duke, even you can work it out.  Which company is 'moving people in the most efficient way possible'?

Duke Fame

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Re: Local elections
« Reply #143 on: June 25, 2014, 12:42:50 PM »
Interesting how ideology-driven stuff used to come from the left-wing of politics. These days it's the right who are the ideologues. The "One Nation" Tories were very much about managing the status quo, the mixed economy. These days,driven by the neo-Con agenda from the USA, they cannot see beyond the privatisation of all things, including our dear NHS, which despite promises, is plummeting from hero to zero under this regime. It is now Labour who take a more measured response, and do not fall into the private good, public bad mentality which is putting our society under so much strain.

There is no ideology, it's just pragmatic common sense (and I'm not a one nation tory, more of a ultra liberal liberal). The NHS should be cherished but that does not mean we should blindly go forward as we always have because frankly, the NHS remit is in danger of far exceeding it's original ideals to an extent it simply is not affordable. The NHS has always contracted our supply, I see no need to keep all services to be provided 'in house' from the NHS. We're in a world health market, when a new theatre light is needed, the NHS does not employ an engineer to design another light, it goes to Seimens, Daray or GEC because (guess what) they are specialist experts at doing these things, surely the same should apply accross the board.

This 'more measured' view wasn't really evident in the 13 years of Labour, particularly the shambolic last 4 years of that tenure.

tigerman

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Re: Local elections
« Reply #142 on: June 25, 2014, 11:16:17 AM »
Interesting how ideology-driven stuff used to come from the left-wing of politics. These days it's the right who are the ideologues. The "One Nation" Tories were very much about managing the status quo, the mixed economy. These days,driven by the neo-Con agenda from the USA, they cannot see beyond the privatisation of all things, including our dear NHS, which despite promises, is plummeting from hero to zero under this regime. It is now Labour who take a more measured response, and do not fall into the private good, public bad mentality which is putting our society under so much strain.

Duke Fame

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Re: Local elections
« Reply #141 on: June 25, 2014, 10:42:32 AM »
Some dodgy stuff there from Duke, with facts 'bent', as usual, to fit his ideological position.
Nothing to do with 'state control' - the ex-Eurostar trains stopped running on the East Coast Mainline when GNER lost the contract to National Express in 2005.

It was not down to GNER losing the contract, GNER Sold / walked away when Sea containers were in trouble - the lease of the Eurostar ended after that and NX did not renew it as they were having trouble committing.



No it doesn't.  Most East Coast Trains are electric InterCity 225s which date from around 1990.  The oldest fleet on former inter-city lines is that of privatised First Great Western, whose Inter City 125s date back to the 1970s..

No, at least 1 set of 225 were taken out by State East Coast (unrepairable? ) and replaced by old 125 sets - Over 50% of ECML locos are the old 125s, whilst GNER ran over 60% of it's services as the newer 225 electric: Kings Cross (yesterday) - the new train on the left is a First Hull train:


First Great western run 125's and Newer 2001/2002 class 180s but the Electrification of the line means they will need to move over to Electric trains when this is complete.




No it isn't.  We now subsidise UK rail services to the tune of about £4 billion.  The equivalent sum at privatisation, adjusted for inflation, was about £1.5 billion.  
Yes, the subsidy per passenger mile is lower, this is partly due to the private companies making train travel far more attractive than the State railway company.

There is no way BR would have faced up to the unions in the way the Tocs have, even if they have been weak.



'yesterday was in the Viz style of reporting