The continent’s approach to rail liberalisation holds lessons for Britain

An NTV train crosses the Tiburtina station in central Rome. Image: Getty.

As universal truths go, it’s not far off “death and taxes”: Britain’s rail network is privatised, the service is abysmal, fares are stratospheric. To restore our railway as a network we can be proud of, it must be renationalised. And we know that will work, because continental European railways are cheap, punctual, pleasurable and nationalised. Right?

Wrong. The binary debate over the future of UK rail is now so entrenched that we have increasingly ceased to question its fundamental tenets. This retreat to dogmatic positions risks doing a grave disservice to the travelling public – and we urgently need to consider both our own railway and those in Europe in a much more nuanced light.

John Band has already knocked down a few shibboleths in his 2015 article on rail fares, so I won’t cover the same ground again. Suffice to say, looking at our own railway’s structure, government control is so pervasive that it is not really credible to claim it is private at all. As in Europe, the railway’s fixed assets (track, stations, signalling etc.) are in public hands, following the reclassification in 2014 of Network Rail as a government entity.

Franchises, meanwhile, are so tightly specified by the Department for Transport (DfT) that any room for entrepreneurial activity has been all but squeezed out. Yes, DfT really does tell operators how many of their trains can have a catering trolley.

Yet arguably even more pressing for UK rail policy is the need to understand the profound changes happening to Europe’s railways as market reforms take root. It is still perfectly possible to jump on a train in Paris, Rome or Munich and find that train is run by a public sector operator, which is often part of a state holding group which also includes the infrastructure manager: train operator Trenitalia and infrastructure manager RFI in the case of Italy, for example.

However, over the past 20 years, EU policymakers have been looking for ways to make the European rail network more competitive. Policy measures have mostly focused on technical harmonisation between disparate national rail networks, but opening up of rail services to competition has also been a key strand.

This liberalisation has been resisted for years in many member states – but we are now reaching a point where the tide is turning, and the widely held perception in Britain of ‘nationalised’ continental railways is increasingly inaccurate. Perhaps most pernicious of all is the misleading suggestion that somehow Deutsche Bahn, SNCF or NS, the Dutch parent of Abellio, are sitting at home chuckling as filthy lucre from the fares of hardworking British commuters trickles into the coffers.

Far from it: most, but not all, European countries have seen some degree of liberalisation.

Take Italy, for starters. On 7 February, Global Infrastructure Partners (owner of London’s Gatwick Airport) made a successful offer of €1·9bn to acquire a company called Nuovo Trasporti Viaggiatori.

Who is that, you ask? Well, NTV runs pointy red high speed trains up, down and across the country, mostly on the dedicated high speed rail network that Italy has been building since the 1960s. Serving destinations including Turin, Venice and Naples, the company runs 50 trains per day on the key business route between Milan and Rome. Using the Italo brand, NTV competes head to head with the public sector operator Trenitalia, and between them they have gained a large majority of the rail/air market between the two hubs.

Unlike most British train companies however, NTV has no franchise or contract with government. It uses the EU’s ‘open access’ rules, paying access charges to use the national network. Its services are genuinely entrepreneurial as a result: if they are not viable, they would not survive.

NTV was established in 2011 by a consortium of high profile investors led by Luca di Montezemolo, whom Formula 1 motor racing fans will know as a former Team Principal at the Ferrari team. (The Italo trains’ scarlet livery is not a coincidence.)

For a few years, the state incumbent sought to frustrate NTV’s ambition amid a lack of strong independent regulation. But NTV has expanded from a niche operator to a significant player, at least on the core inter-city axes. As a consequence, private competition has compelled Trenitalia to up its game.

NTV’s state of the art Alstom trains were soon matched by a rival fleet procured by Trenitalia from Bombardier and Hitachi. Both have a whopping four classes of seating and, naturally, top quality espresso in the buffet car. More importantly, the number of services available between major cities has grown, but the rivalry has kept prices down.


There are lessons for here for Britain. We also have open access players in the shape of Grand Central and Hull Trains, operating out of London King’s Cross. Yet neither has the scale of NTV in Italy, and the government is lukewarm at best about operators who exist outside the contractual headlock of a franchise. For advocates of renationalisation however, there is a major quandary: Hull Trains and Grand Central regularly top passenger satisfaction tables, which suggests that more entrepreneurial zeal, not less, could lead to better services, at least in the long-distance segment.

In Italy, the inter-city network has been opened up to competition, while regional trains are, for now, still run by the state. In Germany, the opposite is true. Almost 40 per cent of German regional trains are now run by companies other than Deutsche Bahn, while DB retains a near monopoly on long-distance routes. Regional rail operating contracts are typically let by regional authorities (usually the Bundesländer), rather than by central government – but just as in Britain, the trains themselves are increasingly leased from the private sector rather than owned by the state.

Trenitalia is the second largest operator in Germany, while many of the companies holding UK franchises are also active. Indeed, British companies like National Express have made major inroads: its chief executive said last year that German contracts were now more attractive to private operators than UK franchising.

Where British and German ‘franchising’ really diverge is in costs. Typically, when DB loses a contract to a competitor, the cost of operation goes down, with a positive impact on subsidy and therefore fares. In an extreme example, Go-Ahead (yes, parent of loathed Southern Rail) has agreed to run several routes around Stuttgart for a period of 13 years from 2019. That contract is costing the regional authority in Baden-Württemberg approximately half the amount per train-kilometre it was giving to DB under the previous agreement. A raft of improvements is planned, including new trains across the network. Yet with such a dramatic reduction in the cost base, the authority also has the option to hold down fares.

Once again, the implications for British rail policy are clear. We should be asking why German rail liberalisation is driving down operating costs while quality of service is broadly improving. Instead, we get increasingly simplistic assertions about the benefits of renationalisation, which hark back to an increasingly hazy recollection of British Rail.

The opening up of Europe’s networks to competition has polarised opinion across the sector, and debate will continue for years to come as to the pros and cons. Indeed, there are areas where the British system has a clear advantage over, say, Germany – for example, a unified ticketing system which allows booking between any two stations, irrespective of operator.

But please let us not labour anymore under romanticised ideas of ‘nationalised’ European rail based on experience from the odd long weekend away. The debate over the future of Britain’s railways deserves a better level of understanding – and there is much to learn from the European experience.

Nick Kingsley is managing editor of Railway Gazette International, the business magazine for the global rail industry. He tweets as @njak_100.

 
 
 
 

There isn’t a war on the motorist. We should start one

These bloody people. Image: Getty.

When should you use the horn on a car? It’s not, and anyone who has been on a road in the UK in living memory will be surprised to hear this, when you are inconvenienced by traffic flow. Nor is it when you are annoyed that you have been very slightly inconvenienced by another driver refusing to break the law in a manner that is objectively dangerous, but which you perceive to be to your advantage.

According to the Highway Code:

“A horn should only be used when warning someone of any danger due to another vehicle or any other kind of danger.”

Let’s be frank: neither you nor I nor anyone we have ever met has ever heard a horn used in such a manner. Even those of us who live in or near places where horns perpetually ring out due to the entitled sociopathy of most drivers. Especially those of us who live in or near such places.

Several roads I frequently find myself pushing a pram up and down in north London are two way traffic, but allow parking on both sides. This being London that means that, in practice, they’re single track road which cars can enter from both ends.

And this being London that means, in practice, that on multiple occasions every day, men – it is literally always men – glower at each other from behind the steering wheels of needlessly big cars, banging their horns in fury that circumstances have, usually through the fault of neither of them, meant they are facing each other on a de facto single track road and now one of them is going to have to reverse for a metre or so.

This, of course, is an unacceptable surrender as far as the drivers’ ego is concerned, and a stalemate seemingly as protracted as the cold war and certainly nosier usually emerges. Occasionally someone will climb out of their beloved vehicle and shout and their opponent in person, which at least has the advantages of being quieter.

I mentioned all this to a friend recently, who suggested that maybe use of car horns should be formally restricted in certain circumstances.

Ha ha ha. Hah.

The Highway Code goes on to say -

“It is illegal to use a horn on a moving vehicle on a restricted road, a road that has street lights and a 30 mph limit, between the times of 11:30 p.m. and 07:00 a.m.”

Is there any UK legal provision more absolutely and comprehensively ignored by those to whom it applies? It might as well not be there. And you can bet that every single person who flouts it considers themselves law abiding. Rather than the perpetual criminal that they in point of fact are.


In the 25 years since I learned to drive I have used a car horn exactly no times, despite having lived in London for more than 20 of them. This is because I have never had occasion to use it appropriately. Neither has anyone else, of course, they’ve just used it inappropriately. Repeatedly.

So here’s my proposal for massively improving all UK  suburban and urban environments at a stroke: ban horns in all new cars and introduce massive, punitive, crippling, life-destroying fines for people caught using them on their old one.

There has never been a war on motorists, despite the persecution fantasies of the kind of middle aged man who thinks owning a book by Jeremy Clarkson is a substitute for a personality. There should be. Let’s start one. Now.

Phase 2 will be mandatory life sentences for people who don’t understand that a green traffic light doesn’t automatically mean you have right of way just because you’re in a car.

Do write in with your suggestions for Phase 3.