The thing is there are multiple companies/sectors involved here, and this isn’t addressing the worst of them (yet, if ever).
First you have the railway lines themselves. These are run by Network Rail, which is already a part of the Department for Transport. This part covers a significant expense, but it’s needed and run fairly lean.
Then you have the train companies. These are the ones running the trains, they are typically private businesses. They lease rail stock (trains and carriages) and sell tickets, while paying Network Rail for the use of the lines. These are the customer facing businesses, and South Western Rail is one of them and the one nationalised in this story. In spite of having high ticket prices and revenue, they have low profits due to high costs.
Lastly you have the rail stock companies. These are the real villains, frankly, much moreso than train companies. They set leasing prices for trains, and in turn cause the train companies to run at paper thin margins. They aren’t customer facing, so the public eye isn’t upon them and they get away with a lot. They have established long term contracts, so simply nationalising a train company won’t end this deal.
However, nationalising train companies does mean that the government (either the DfT or the new Great British Railways) will be negotiating with rail stock companies. In theory, the government are a bigger entity, so have a better negotiating position, and also they should be more motivated to bring the costs down. Private rail companies make more money overall with paper thin margins on high prices, not only because a small percentage of a bigger number can be bigger, but because having a small margin puts them in a better negotiating position with local government (“You have to give us a good deal, we can’t afford to operate otherwise, and you need us”).
So nationalising train companies might lead to lower prices in future, through fairer leasing rates on rail stock. However this won’t start to happen until these contracts are renewed.
Really, a much heavier hand is needed from the government, one that focuses specifically on the rail stock leasing sector.
unexposedhazard@discuss.tchncs.de 2 days ago
Renationalaizing and extending rail would solve so much in basically every country in Europe. There is soo much demand for it and rail companies everywhere are just cranking up prices without expanding at all.
HumanPenguin@feddit.uk 2 days ago
Well renationalisation is happening. Or pretty darn close to it.
We will see news like this again and again. As all the rail contracts come up for renewal. Labour plans to either nationalised or accept community coop like bids.
Expectation is all will be moved by 2027.
Tweak@feddit.uk 1 day ago
Rail contracts and train companies aren’t the problem. The problem is rail stock leasing, which has obsene prices and pushings the public-facing train companies to both be expensive but also run a paper thin margin. Nationalising the train companies won’t do anything about rail stock leasing, the government needs to focus on the root problem, not buy out the under-performing public facing business at a high price.
ohulancutash@feddit.uk 2 days ago
This is the first “franchise” to be cancelled, the others were franchises that are extant but run by the operator of last resort.
It’s not making a bigger splash because the Tories nationalised the entire network in 2020 by abolishing all the franchises and replacing them with management contracts, whereby the operators are paid a flat fee by DfT to run the service.
The pace of absorption by GBR is dictated by the franchise terms, and operators seem to be being allowed to reach the end of their contract terms if that is in the next couple of years, or else having their break clauses invoked when they come into eligibility.
wewbull@feddit.uk 2 days ago
They’re nationalise the train operating companies, right? Not the company that owns the lines, which seems the wrong way round to me. The tracks and stations are the vital resources.
unexposedhazard@discuss.tchncs.de 2 days ago
Starmer is buddies with big tech bosses and other monopolists so nobody really believes he is gonna do any good. The rest of his government might, but he is rotten to the core.