Ian King, Business Presenter

The annual fare increases, along with more strikes, have revived calls for Britain's railways to be renationalised.

Labour, despite last year's embarrassment when Jeremy Corbyn claimed he was forced to sit on a floor during a Virgin Trains journey where seats were available, has led them.

Even some Conservatives, tired of forking out thousands for a season ticket that does not even guarantee a seat on their daily commute, like the idea.

Yet there are few questions to which the answer is renationalising the railways.


Privatisation has been a success: 1.65 billion rail journeys are made annually, more than double the number before privatisation, while the volume of freight carried on the railways is up 80% since privatisation.

Supporters of renationalisation argue some of this growth would have happened anyway, due to the rising population and overall economic growth.

Yet the rise in journeys made in the UK far exceeds the growth in countries that have seen comparable economic growth during the period, like Germany, France and the Netherlands.

Compare that with the 35 years prior to privatisation, during which passenger numbers fell by a third.

Motorists do not expect other taxpayers to pay for their petrol or diesel, so why should rail passengers expect other taxpayers to subsidise their journeys?

The railways suffered decades of decline in public ownership.

Post-privatisation, on Europe's fastest-growing rail network, stations and branch lines are actually being re-opened, in contrast with France and Germany, where stations, routes and lines are being cut or even considered for closure.

It is also hard to see how renationalisation would solve the main passenger complaints - delays, overcrowding and high ticket prices.

Many delays - up to two-thirds, depending on the route - are caused not by the private operators but by Network Rail, which is already state-owned.

Supporters of renationalisation argue fares could fall if profits currently made by train operators were diverted back into the rail network.

Not really. These companies do not earn enough profits to make a difference.

The inside track on driver-only trains

Profit margins made by the private train operators are wafer-thin, at an average of just 3%, meaning that 97p in every £1 from fares already pays to run and improve services.

Nationalising rail operations would simply not bring in enough money to cut fares meaningfully.

In any case, the main reason rail fares are rising is the deliberate Government decision to make rail passengers pay for trains, rather than taxpayers.

That is fair enough: motorists do not expect other taxpayers to pay for their petrol or diesel, so why should rail passengers expect other taxpayers to subsidise their journeys?

When 63% of all daily rail journeys begin and end in London, it is particularly odd that Labour, most of whose MPs represent seats in the Midlands, the North of England and Wales, should want their constituents to subsidise the travelling costs of comparatively wealthier commuters in the south-east of England.

The rise in fares this year, incidentally, was the lowest in six years.

This shift from making taxpayers pay for the railways, to making rail users pay, is working.

The extra revenue from fares, due to a higher number of journeys being made, means Britain's railways, for the first time in living memory, are now more than covering their day-to-day running costs.

In 1997-98, the railways were losing £2bn annually. In 2014-15, the most recent year for which figures are available, they made a net contribution of £200m to the Government via franchise payments.

The taxpayer's contribution to the network is now limited to capital investment, in other words, upgrades to the network.

Ah, say supporters of renationalisation, that just shows extra taxpayer support is needed for upgrades to reduce overcrowding.

The problem with that is that extra money would not be guaranteed.

The Government is already set to borrow nearly £70bn this year and, when services like the NHS are making ever-larger demands on the taxpayer, it is hard to see any Transport Secretary successfully persuading the Chancellor to give the railways a larger share of the pie when a comparatively small proportion of the population actually uses them every day.

Veterans of the old British Rail recall maintenance projects being held up due to a lack of cash when funds were tight. The same would happen after renationalisation.

One alternative to funding upgrades from general taxation could be issuing bonds, as Transport for London and Network Rail do. But even in these instances bondholders require a return on the capital they put up - just as shareholders in train operators like Stagecoach, FirstGroup and Go-Ahead do.

Renationalisation would also be a gift to the unions currently creating mayhem on franchises like Southern.

One of the great benefits of privatisation was that working practices were modernised and upgraded and promotions given on merit, rather than for time-serving.

Nationalisation would throw a lot of that into reverse. The current industrial unrest on the railways is nothing compared with what would happen once, after renationalisation, the unions flexed their muscles ahead of each annual pay round.

All that is before going into the woeful service levels under the old British Rail - which did not even bother publishing its punctuality record. Not to mention the catering.

The former Cabinet minister Lord Tebbit recalls debating rail privatisation with a group of Millwall fans on a train when one of them piped up: "Norm, mate, you're right. They've run out of f****** beer. Only a nationalised pub would run out of beer on a Saturday night." Quite.

Sky Views is a series of comment pieces by Sky News editors and correspondents, published every morning.

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