Home Business The Government Is Financially Exposed To The Railways But Doesn't Own Them

The Government Is Financially Exposed To The Railways But Doesn’t Own Them

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The Guardian is cheering on certain of the unions as they insist that the government now owns the railways. This is not actually so. The government is financially exposed to the railways which is why they are to be put onto the books of what the government is financially exposed to. This is not the same as stating that the government owns the rail franchise companies – only that it’s financially responsible for them.

This is more than a subtle difference – the BBC licence fee is a tax but the government doesn’t own nor control the BBC in the common parlance now, does it?

ONS says UK rail has effectively been renationalised during pandemic

Actually, no, ONS hasn’t said that. Here’s what it does say:

Any organisation’s classification status is a statistical matter that does not have any direct implications in areas such as ownership, legal status, or management structure. Therefore, following a classification, the only direct change is how an organisation is accounted for in ONS official statistics.

The point here being who carries the losses of those rail franchises right now? Or, even, the profits? Under the recent changes it’s the government – or you and me as taxpayers. This is the way parts of the southern network have been run for some years. There’s the actual operational and management side, who get a couple of percent for doing that, ticket revenue goes to the Treasury, all costs – plus the 2% – come out of the Treasury.

But it’s not a change of ownership, it’s simply a reflection of who is carrying the financial risks. So, it’s not renationalisation.

As to why it is being claimed it is:

However, the transport union TSSA, which has consistently called for rail nationalisation, urged the transport secretary, Grant Shapps, to seize the opportunity to do so.

“The Office for National Statistics has candidly exposed the truth about our railways – they are now in public ownership,” said the TSSA general secretary, Manuel Cortes.

“I know that telling the truth isn’t this Tory government’s forte. However, the transport secretary, Grant Shapps, must come clean and acknowledge that our railways are now in public ownership and take direct control of running them rather than continue to line the pockets of fleecing privateers with taxpayers’ money.”

Their argument being that the railways should revert to what they should be, a manner of lining the pockets of fleecing union members with taxpayers’ money. For we know damn well that central government isn’t going to bear own upon the privileged workers as hard as any would be profit making capitalist would. The Guardian also knows this which is why the headline. They want it to be true that the railways are renationalised so why not assume they already have been? Saying it is so is the same as making it happen, isn’t it?

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5 COMMENTS

  1. Akcherly, the government *does* own the railways. It’s the trains that the government doesn’t own. I don’t have any great philosophical objection to that, in essense it’s the same as the government owns the roads, but doesn’t own the buses.

  2. The unions should be careful what they ask for. If your government has the balls, nationalizing the railroads could be an opportunity. I don’t know how it works there, but here in Leftpondia government workers don’t have the right to strike. Ask PATCO how well that worked out.

    Of course the union’s agreement is with the operating company, so new union representation would be required. The government employee unions would have the first right to organize the employees. That would be an interesting union fight.

    Pension plans were also with the operating company, so all vesting and seniority would need to be reset. The new plan would be what the current government pension plan is. With normal vesting, age, and years of service to retirement.

    Thatcher could have done it, but I don’t think Johnson is up to the job.

  3. Doesn’t the State own the company that owns track & infrastructure? Doesn’t the State own the Right to operate trains up and down the track it owns? Sound like the State owns the railways, but subcontracts the running of trains. Last I heard the State subsidy to those subcontractors was £1 billion annually so they can pay the State to use its permanent way.

    Pretend privatisation/denationalisation. I believe a John Major triumph.

    • @ John B
      John Major denationalised Railtrack. Fact!
      New Labour renationalised it, after some politically-motivated strikes, based on a report, from one of Darling’s cronies, riddled with factual inaccuracies (I read it twenty-odd years ago) and screwed up the renationalisation by seizing the operating company and then finding it had to compensate the holding company for stealing an asset (ECHR and all that).
      Network Rail was created and appointed said crony as CEO, paying his personal company (owned by himself and his wife) a fat-cat salary. Network Rail’s performance was noticeably – especially to commuters “the wrong kind of snow” – worse than Railtrack’s but no-one has yet dared to re-privatise due to the certainty of political strikes and sabotage by the rail unions.

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expunct

in British English
expunct (ɪkˈspʌŋkt)
VERB (transitive)
1. to delete or erase; blot out; obliterate
2. to wipe out or destroy

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