My Dad always complained about Thatcher’s privatisation on what he called Thatcherism as it represents a belief held by many anti Thatcher cheerleaders that capitalism and free market theory does or does not triumph, even in circumstances where it is at a distinct disadvantage…much like our railways! Yet like him, and his friends will refuse to give up, or concede that they’re economic ideology is a tiny bit flawed, even when its glaringly obvious that its failing.
The truth is free market theory will only work in certain circumstances, notably situations where there is truly a “free” market (not a cosy mafia, well I did like The God Father), where there is actual “competition” (could kill it off financially, job done) and the economic model being promoted is actually sustainable and water tight (our no’s add up bullshit I hear you say). None of these conditions applied to the UK railways at privatisation. Firstly companies had to bid to get the contracts. As a result from day one all the individual rail companies had a huge deficit on their balance sheet and lots of stake holder’s looking for a profit to be turned in quickly to give “confidence” to the markets (else the companies would find it impossible to raise money later without going to the government).
Also, in fairness to the railway companies, competition will only occur when there’s a level playing field. The things the railway boy’s should be competing against, cars and short haul flights, are both massively subsided by the government (a lot more than the measly 5 Billion the railways get).
It’s hard to believe that the railway train companies have to pay tax on fuel, but the Airline’s doesn’t. Add in the costs of maintaining the UK’s airports, traffic control, fire and emergency cover, the cost of building all those airports and support infrastructure to begin with, not to mention the costs of climate change (please don’t get me started with climate control), you know air travel is 5-10 times worse (depends if you ask Greenpeace right) per mile travelled than trains. Taking all this into account and you can see that there are a whole set of hidden costs that you’re Flybe £28.41 Exeter to London City ticket doesn’t cover. Well you could also travel in relaxing style by taking a Limousine to the airport, make sure you don’t drink to much or you wont make the steps of the airplane