The railway that passes our constituency office in Bethnal Green and Bow is owned by Abellio, the Dutch state railway company. Am I alone in thinking this is somewhat surreal?
We put these franchises out to tender because we wanted the private sector to provide their management know-how. It turns out that this company is not private sector but is the state sector of Holland. So rather than having the British state running British railways, we have the Dutch state running British railways, because they outbid the private rail companies, presumably because they have better management know-how.
Meanwhile, we customers have to pay higher fares, in order that a profit can be made to subsidise the Dutch rail system. We might consider that the Dutch are very good at doing socialism, but they must consider us to be a bunch of mugs.
The East Coast Main Line is once again being put out to tender. Of the three bidders in the process, one of them is a consortium of SNCF, the French state railway company. SBCF, the Belgian state railway service, and most surreal of all, KCR, which is the private company that went bust and is now owned by the British state. So it’s not private companies that we need, but foreign state owned rail companies.
Why do the Tories think that foreigners are better than us at everything? By the way, other bidders include First Group and Virgin.
It may be that privatisation is useful for creating efficiencies, but this already happened in the 90s. Now that the efficiencies have been achieved, there isn’t a magic wand to create more. If there was then why did Richard Branson complain about First Group’s winning bid for the West Coast line being too low to make any money? First Group eventually dropped their bid, because Branson was right. This is a fixed cost business. There are no further efficiencies to be made.
Ed Miliband has put Mary Creagh MP in charge of the rail policy. She is bright, and is highly rated by Progress, so we’ll wait and see what her recommendation is. We know that the Tories will push ahead with the franchise auction. The question is whether we campaign against them.
A £1bn sale of the franchise is £1bn added to tickets, before the owner has had a chance to increase ticket prices to achieve their profits. Those CLPs in the marginal seats along the line may well appreciate a campaign that reminds voters of who the Tory party really represent.
Since the East Coast Main Line has been run by the state, everyone has been happy. The staff are happy and the customers are happy, judging by the crowds in particular. It would make sense to continue as we are. It has become difficult to justify such expensive franchise sales.
If ending the franchise system were to become our policy, then we don’t need to buy out the private operators, as this would be expensive. It would be better to simply wait for them to expire, and then not offer them for renewal.