| Topic: | Re:Re:Re:Re:Ruth Cadbury's Call to Nationalise the Railways | |
| Posted by: | Michael Robinson | |
| Date/Time: | 29/01/20 16:30:00 |
| 'The fact that the government underwrites the railway companies' industrial disputes removes any encouragement for the companies to come to any agreement with their staff' I think the point is that if the government didn't underwrite the arrangements then companies wouldn't touch the franchise with a bargepole because the level of risk is too high for the rewards on offer. So there is a bit of a paradox in that the government wants private companies competing for the opportunity to run a franchise. However the government has created this market and they set the rules so it isn't like other areas of the economy where a free market has evolved. It could be argued that the current franchise model is an artificial market propped up by the government and renationalisation is simply recognising this. This is what happens in London. TfL contract out operation of the Overground and Crossrail to third parties but this is done as a service contract. TfL collect the fares and take the risk these may be less than they thought they would be. One area that is unlikely to be nationalised is ownership of the rolling stock. These are owned by leasing companies and leased to the operating companies, so similar to what happens in the airline industry. |