May 31, 2006 at 11 PM

Privatised

Government-run companies and services are rarely efficient, but they do tend to follow one dictum: the paramount interest is the customers — or rather, the voters. Still, state monopolies are often the victims of poor management (they don’t easily attract competent managers) and labour discord (public-sector unions are ruthless and mighty). Many people believe that competition produces better results. Those people also often own newspapers and television networks, and so they can spread their views easily. Privatization has been and continues to be a common occurrence in Western countries, but it’s still an issue rarely short on controversy.

I suppose every capitalist country has had at least one botched privatization, but I can’t help but think that Britain seems to specialize in it. The major utilities in Britain have all been opened to competition, and it’s difficult to see any advantage from it for anyone, except of course for the shareholders of the companies — the profitable ones anyhow.

Nowhere is the privatized mud clearer than with the trains. Grumbling about trains is, I’m sure, an old British pastime, but then again, so is spotting them. You’d think a country that loves its rails so much would do a better job of managing them.

You see, where the British went wrong was that they pretty much missed the entire point of privatization: competition. Competition drives markets. But creating competing train services is difficult. A bit of a quandary, really. You can’t have duplicate tracks running everywhere, so who controls the rails and the signals? Who controls the stations and the platforms? What to do, what to do.

Now a rational person might stop right there and decide that this is an excellent reason not to have private rail services. Public transport is a common good, not a luxury item. Efficient and affordable train service benefits the country by increasing mobility and decreasing car traffic and thereby pollution and energy consumption. Yes, the rational person might see trains as one of the few things that really ought to be centrally controlled. A rational person, however, does not oversee rail policy on this island.

Instead of creating competing services, the British government “mixed things up” by dividing British Rail into pieces. Ownership of the tracks, signals and main stations was left to a not-for-profit company. Ownership of the “rolling stock” (the actual vehicles) was divided amongst three large banks. Yes, banks. Don’t ask. And finally, the operation of the passenger trains (you know, the actual, meat and Yorkshire pudding of it) was divided into an intricate web of “franchises”, each responsible for certain routes, and offered up for lease by private companies. A franchise has no direct competition. On some journeys, there may be different ways of getting from A to B (do you want to stop in Derby or Crewe?), but in the vast majority of trips, where you are coming from and going to determines who you will have to shop with.

Confusingly, some of the franchises are owned by the same parent company, despite having separate and incompatible services and fares. One of the wonderful “quirks” of British train travel is that it is generally cheaper to travel with just one franchise. If you can get from A to B with them, great, you’ll save some money. If you can’t, then oops, it’ll cost you more, even if your money is going to the same great bank account in the sky.

Sort of. Actually, it turns out that when you buy a ticket that includes just one franchise, they get to keep most of the money. But if your ticket includes services on multiple franchises, then the company from whom you’ve bought the ticket gets a much smaller share. And you can buy any ticket for any journey from any train company, if you want. But if you want a discounted ticket (that is, an affordable one), then you have to choose the right company.

The end result is madness. I can get from Nottingham to London and back for £12 if I find a discount ticket. Or I can spend £40 on a walk-up fare. On the other hand, the cheapest available ticket to Cambridge, a much closer city, costs almost the same, because there is no direct service, and therefore no discount. (It also takes an hour more.)

But wait. It turns out that ticket prices, though heavily regulated, are not at all coordinated. If you have to switch trains, it is often cheaper to buy separate tickets for each leg than to buy one ticket for your entire journey. If I buy a ticket from Nottingham to Ely, then one from Ely to Cambridge, I can save lots of money. That’s because each franchise will then sell me discounted tickets which they otherwise would not (because then they’d have to share it with the other companies).

Don’t even get me started on the Heathrow Express, which costs £14 each way to get from London to Heathrow Airport. Yes, it costs twice as much to get to a London airport from London than it does to get to London from a city two hours away. Just accept it.

I end this rant with a peace offering. I’m not the only one who has realized the trick with buying separate tickets. Today I discovered the Cheaper Train Fare Finder, a web site to help you accomplish this very feat, created by a mathematician in London.

You’ll need the help. For one, it’ll help you get over your rage when you look at graphs like this. Don’t take just my word for it though: a lot of other folks agree. As they say here: rubbish.

Previously: All Tomorrow’s Parties 2006

Subsequently: Speak of the…

May 2006
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