Tuesday 25 April 2017

The great HS2 Rip Off and how the the Conservative government guarantee profits for private monopolies

The Evenimng Standard is reporting that there has been an outcry as the French Government owned operator SNCF has tabled a bid to run the HS2 service when it has been built (with UK Taxpayers money). Union leaders are furious that the taxpayer has paid to build the line, but the French taxpayers will reap the profits. Whilst I find this proposition ridiculous, there is another scandal that the Standard and the Unions have missed altogether. It appears that HS2 and the existing West Coast franchise are going to all be rolled up into one big franchise. One of the attractions for me of the HS2 service was that it offered the prospect of more competition on the London to Birmingham route. This is one of the busiest services and by splitting the two routes, I saw the possibility of competition forcing down prices of fast train travel between the two cities. Whilst the HS2 services would undoubtedly be faster, trains running over the existing route are not slow and for many people, savings on fares would be a price worth paying for a few extra minutes. This would force the HS2 route to also sharpen up its act. However by rolling the whole lot up into one franchise, the lucky winner will be able to rig the prices so the taxpaying commuters, who paid for the line to be built, have to stump up a premium fare.

This is not completely unprecedented. In May 2003, there was a huge refurbishment of the existing West Coast railway. For a period of eighteen months, there were very limited routes over the line to Manchester. The rail regulator realised that this would be bad for Britain, so they made the then operator of the Midland Mainline service, from St Pancras, to set up a direct service from St Pancras to Manchester.  This lasted until September 2004. This service proved popular, especially in the East Midlands, where many people appreciated a direct service to Manchester. However despite the fact that this service could be accomodated, offered the prospect of competition on the route and was popular, the rail regulator insisted it was closed down at the end of the engineering works. There was never the slightest chance that having seen there was a potential for a better deal for passengers, a rival service would be allowed to flourish. The reason? Rail Franchises are nice little earners. They are not designed to improve the lot of passengers. They are designed to make big profits for operators. If passengers decided it was worth an extra half an hour on the train to save a decent amount of cash, then that would be no good at all, would it? If that started to happen, dodgy operators would have to start upping their game.

Let me give you an example. I took two journeys of similar distance. London to Iswich and London to Bedford, leaving at 6pm today. The cheapest ticket on the Trainline to Ipswich  was £49.20 and it takes 1hour and 11 mins. The journey London to Bedford takes 57 minutes and costs £23.60. Why is a journey taking only 14 minutes longer more than twice the cost? It may seem puzzling until you realsie that on the Ipswich route, there is only one operator. That is Greater Anglia. On the London to Bedford route, there are two operators, Thameslink and East Midlands Trains. It is clear that if there is competition, prices are lower. An even starker example is the cost of a train from St Pancras to Wellingborough. This is the next stop up the line from Bedford, but is only served by East Midlands trains. For that extra hop, the cost rises to £57.00. If you were to buy two tickets, one from London to Bedford it's £23.60. The ticket from Bedford to Wellingborough is a mere £10.50, realising a saving of nearly £23.

This whole mad system is a product of a Conservative obsession with privatisation. Does this serve the passengers or the rich companies? Clearly not. However because they couldn't possibly admit that British Rail, a nationalised entity, could be better value, we are forced to pay through the nose to subsidise companies owned by foreign governments. The Tories may preach Brexit, but they are happy to sell the crown jewels!

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