A nationalised railway doesn’t have to be rubbish – but this one probably would be

The good old days. Image: Getty

As the general election nears, the major parties are starting to set out their vision for Great Britain’s railways. The Conservative manifesto will appear later this week. Think-tanks associated with the sillier end of the party have lobbied for Network Rail to be privatised, which would be a disaster, so it’s worth keeping a look out.

But Labour’s manifesto was published on Tuesday. Stephen Bush has a good summary, and you can read the whole thing here. One of its more eye-catching pledges is “public ownership” for the railways.

As we’ve covered before, this covers a lot of ground. Network Rail, which owns the tracks, operates maintenance and signalling, manages new-build projects, and allocates and manages train paths, has been in the public sector since 2002, and under the direct control of the Department for Transport (DfT) since 2014.

The manifesto clarifies Labour’s line with the phrase “as franchises expire”. This implies it’s talking about train operating companies (TOCs), like Chiltern or Northern Rail. These are contracted by the DfT to run passenger train services: every few years there is a bidding auction to see who’ll pay the biggest premium for the right to operate trains on a given route.

The winning bidder must meet a service specification agreed with the DfT, pay track charges to Network Rail, lease the trains that are needed to operate the service, and pay staff. In exchange, it gets to set and collect fares on the route, subject to price caps laid down by the DfT, and to keep whatever’s left once it’s paid everyone else.

So if Labour wins a majority in next month’s election, then when franchises start expiring, they will be delivered in-house. There is a model for this, which has been successful on a small scale: the DfT has a subsidiary called Directly Operated Railways, which takes over from a franchisee if they go bust. When National Express East Coast went bust in 2009, DOR took the franchise and provided a good service. Although it fell short of the premiums NXEC had originally pledged to pay, it returned £235m in profit to the DfT in its final year of operation.

There are, however, two problems seeking to apply this small-scale success to Labour’s plans. One is simple scalability. When East Coast was benchmarked against private operators, it was very clear to everyone involved what a good job consisted of. But if the entire business is nationalised, there’s no obvious way to determine whether the public operator is providing good value for money, and not much incentive for it to do so.

There are structures that maintain benchmarking and competition under government control. The most obvious is in London, where TfL sets all aspects of the service and takes all the profit/loss risk, but ensures value for money by contracting out some operations. The same could be done by devolved regional governments (which would also enhance local accountability), and directly by the DfT for long distance and regional services.


This isn’t what’s happening, though. Labour’s pledge that the new operator “will be built on the platform of Network Rail” sounds more like an attempt to recreate the monolithic structure of British Rail. This is, at best, untested in the modern era.

The second problem with Labour’s manifesto version of nationalisation is the side promises being made. Explicit pledges include “ending the expansion of driver only operation” and “freezing fares”.

The first of these is a bad idea. Driver-only operation is a proven safe way of reducing costs without inconveniencing passengers, already used on 30 per cent of the network. The pledge has been modified from an earlier leaked draft which suggested DOO should be abolished altogether, but refusing to expand it takes away an opportunity to cut costs, with no benefit to passengers.

The second helps passengers more, but it’ll be expensive. Regulated train fares rise in line with inflation at about 2 per cent a year (1.8 per cent or 2.3 per cent, depending on whose methodology you use). With farebox revenue of £9.4bn, that’s an extra £200m a year to find in year 1, and £400m in year 2. After five years, there’ll be a £1bn/year gap compared to currently planned rises. And regulated fares are mainly used on already-full commuter trains, so there won’t be much volume growth to make up it.

Will abolishing TOCs pay for this? Annual TOC profits distributed to shareholders are £200m per year. So if the scale issues can be solved and the new model works as well as East Coast, then the savings in the first year will pay for the fares freeze. Hooray!

But this is a one-off gain: in the second year, we’ll need to find another £200m to pay for that year’s fare freeze. By year five, there’ll be a £800m/year revenue gap. AAnd we won’t be able to save money on guards to make up for it.

Overall, Labour’s rail plans are less terrifying and damaging than some of the options the Conservatives are contemplating – and there’s certainly nothing wrong with moving away from the TOC model in itself.

But the devil is in the detail, and the details here suggest that Labour’s plans are more focused on quid-pro-quos for the unions and cash bungs for commuters, than on the actual reason you might want to move away from the TOC model: the core job of shifting more people and freight onto the railways as efficiently and safely as possible.

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Was the decline in Liverpool’s historic population really that unusual?

A view of Liverpool from Birkenhead. Image: Getty.

It is often reported that Liverpool’s population halved after the 1930s. But is this true? Or is it a myth?

Often, it’s simply assumed that it’s true. The end. Indeed, proud Londoner Lord Adonis – a leading proponent of the Liverpool-bypassing High Speed 2 railway, current chair of the National Infrastructure Commission, and generally a very influential person – stood on the stairs in Liverpool Town Hall in 2011 and said:

“The population of Liverpool has nearly halved in the last 50 years.”

This raises two questions. Firstly, did the population of the City of Liverpool really nearly halve in the 50 year period to 2011? That’s easy to check using this University of Portsmouth website – so I did just that (even though I knew he was wrong anyway). In 2011, the population of the City of Liverpool was 466,415. Fifty years earlier, in 1961, it was 737,637, which equates to a 37 per cent drop. Oops!

In fact, the City of Liverpool’s peak population was recorded in the 1931 Census as 846,302. Its lowest subsequent figure was recorded in the 2001 Census as 439,428 – which represents a 48 per cent decline from the peak population, over a 70 year period.

Compare this to the population figures for the similarly sized City of Manchester. Its peak population also recorded in the 1931 Census as 748,729, and its lowest subsequent figure was also recorded in the 2001 Census, as 392,830. This also represents a 48 per cent decline from the peak population, over the same 70 year period.

So, as can be seen here, Liverpool is not a special case at all. Which makes me wonder why it is often singled out or portrayed as exceptional in this regard, in the media and, indeed, by some badly briefed politicians. Even London has a similar story to tell, and it is told rather well in this recent article by a Londoner, for the Museum of London. (Editor’s note: It’s one of mine.)

This leads me onto the second question: where have all those people gone: London? The Moon? Mars?

Well, it turns out that the answer is bit boring and obvious actually: after World War 2, lots of people moved to the suburbs. You know: cars, commuter trains, slum clearance, the Blitz, all that stuff. In other words, Liverpool is just like many other places: after the war, this country experienced a depopulation bonanza.


So what form did this movement to the suburbs take, as far as Liverpool was concerned? Well, people moved and were moved to the suburbs of Greater Liverpool, in what are now the outer boroughs of the city region: Halton, Knowsley, St Helens, Sefton, Wirral. Others moved further, to Cheshire West & Chester, West Lancashire, Warrington, even nearby North Wales, as previously discussed here.

In common with many cities, indeed, Liverpool City Council actually built and owned large several ‘New Town’ council estates, to which they moved tens of thousands of people to from Liverpool’s inner districts: Winsford in Cheshire West (where comedian John Bishop grew up), Runcorn in Halton (where comedian John Bishop also grew up), Skelmersdale in West Lancashire, Kirkby in Knowsley. There is nothing unique or sinister here about Liverpool (apart from comedian John Bishop). This was common practice across the country – Indeed, it was central government policy – and resulted in about 160,000 people being ‘removed’ from the Liverpool local authority area.

Many other people also moved to the nearby suburbs of Greater Liverpool to private housing – another trend reflected across the country. It’s worth acknowledging, however, that cities across the world are subject to a level of ‘churn’ in population, whereby many people move out and many people move in, over time, too.

So how did those prominent images of derelict streets in the inner-city part of the City of Liverpool local authority area come about? For that, you have to blame the last Labour government’s over-zealous ‘Housing Market Renewal Initiative’ (HMRI) disaster – and the over enthusiastic participation of the then-Lib Dem controlled city council. On the promise of ‘free’ money from central government, the latter removed hundreds of people from their homes with a view to demolishing the Victorian terraces, and building new replacements. Many of these houses, in truth, were already fully modernised, owner-occupied houses within viable and longstanding communities, as can be seen here in Voelas Street, one of the famous Welsh Streets of Liverpool:

Voelas Street before HMRI implementation. Image: WelshStreets.co.uk.

The same picture after HMRI implementation Image: WelshStreets.co.uk. 

Nonetheless: the council bought the houses and ‘tinned them up’ ready for demolition. Then the coalition Conservative/Lib Dem government, elected in 2010, pulled the plug on the scheme. 

Fast forward to 2017 and many of the condemned houses have been renovated, in a process which is still ongoing. These are over-subscribed when they come to market, suggesting that the idea was never appropriate for Liverpool on that scale. 

At any rate, it turns out that the Liverpool metropolitan population is pretty much the same as it was at its peak in 1931 (depending where the local borough boundaries are arbitrarily drawn). It just begs the question: why are well educated and supposedly clever people misrepresenting the Liverpool metropolis, in particular, in this way so often? Surely they aren’t stupid are they?


And why are some people so determined to always isolate the City of Liverpool from its hinterland, while London is always described in terms of its whole urban area? It just confuses and undermines what would otherwise often be worthwhile comparisons and discussions. Or, to put it another way: “never, ever, compare apples with larger urban zones”.

In a recent Channel 4 documentary, for example, the well-known and respected journalist Michael Burke directly compared the forecast population growths, by 2039, of the City of Liverpool single local authority area against that of the combined 33 local authority areas of Greater London: 42,722 versus 2.187,708. I mean, what bizarre point is such an inappropriate comparison even trying to make? It is like comparing the projected growth of a normal sized-person’s head with the projected growth of the whole of an obese person, over a protracted period.

Having said all that, there is an important sensible conversation to be had as to why the populations of the Greater Liverpool metropolis and others haven’t grown as fast as maybe should have been the case, whilst, in recent times, the Greater London population has been burgeoning. But constantly pitching it as some sort of rare local apocalypse helps no one.

Dave Mail has declared himself CityMetric’s Liverpool City Region correspondent. He will be updating us on the brave new world of Liverpool City Region, mostly monthly, in ‘E-mail from Liverpool City Region’ and he is on twitter @davemail2017.