Britain's railway privatization was an abject failure

The problem was more that - in typical privatised fashion - the industry was treated as a cash grab, and property speculation and other side quests got more management attention than running a safe railway.

That first incarnation was so bad it was quickly nuked, and replaced with the hybrid arrangement we have today, which has a much better safety record, but is still comically expensive and inefficient.

And franchises very clearly have improved, so that's incorrect too. Delays and cancellations are down across the network, and that's before the system is reintegrated.

https://www.theguardian.com/business/ng-interactive/2025/oct...

The biggest disaster of privatisation was the loss of more than a century of engineering and management culture and knowledge. The UK invented tilting train technology, and it was given away to foreign corporations instead of being licensed and exploited in the UK.

This is the pattern behind all UK privatisation. Foreign countries and shareholders benefited hugely, while prices of essential services exploded, and service quality degraded.

It's a question of perspective. I've spent my life in countries where I've seen my taxes being spent relatively well, I feel the benefits of it daily both as a private citizen and a founder. Everywhere I've lived, when transport, utilities, healthcare and education, even part of the media, were publicly managed, they were simply better and cheaper.

But I understand that this is not universal and that most governments don't operate effectively for their taxpayers. And that, yes, if the whole system is set up for it, private solutions can also thrive and be superior. I suppose it's hard to privatize public services effectively in an ecosystem that doesn't support private enterprise as much.

This is in fact an interesting by-product of privatisation: train drivers became rarer due to shareholder reluctance to train and recruit them. They consequently became more expensive. A somewhat fun side effect of the free market, especially given the prevailing assumption that moving public sector employees into the private sector would drive down their pay and conditions.

Yes and that's as it should be, a fully loaded high speed intercity train has more souls on board than most commercial aviation planes (apologies pet peeve of mine because our media keeps banging on about how "overpaid" train drivers are when in reality their pay is fair for the responsibility it's everyone else who is underpaid).

A bad day at the office for me is I break production and cost the company some money, a bad day at the office for them is considerably more serious - it's a lot of responsibility.

I must be an engineer for a different Network Rail

Train workers consistently strike, not because they are not well paid (though nowhere near airline pilots- though that is in free-fall), but because cuts to staff lead to safety issues.

The profits of the train system has never been higher, and the salaries of workers has stagnated in real terms for more than a decade.

Sure, but HS2 has little to do with Network Rail, the government entity that owns and operates most of the UK’s existing rail infrastructure.

There’s a whole other inefficient bureaucracy (HS2 Ltd) behind HS2!

Well, what do you expect? Rosa Luxemburg Stiftung is a far-left NGO (the N stands for "Near"), the official trust of the German political party Die Linke.

DB (Schenker) buys stakes in transportation all over the world - with German tax payer money: A fact that many Germans do not like given the very poor train service in their own country.

Doesn't necessarily impact season ticket holders but it's been a pretty good move for the most part, and a well received change.

DBs state is probably too unique to draw any conclusions (attempted privatization stopped just before IPO, so now it's lot of different state-owned private organizations with degraded infrastructure). But the stations are actually fairly straight forward: the platforms and the means to get there are still publicly owned, but 80% of the station buildings have been sold off to private operators. The bigger ones are glorified malls that are exempt from laws about shopping hours, the smaller ones mostly just decay

The problem is that there is massive political gain to both sides so we will likely keep rotating through the same options. In either case, the exact same people are in control, and no-one will ever ask whether the issue might be the people.

I also think that people fundamentally misunderstand why they were privatized: the public cost was massive, it was ever growing, and there was no capacity to fix this. Any discussion around money was completely impossible. Can you think of any part of the government where this is true? Actually, can you think of any part of the government where this isn't true? The government struggles to do bin collections, they struggle to police effectively, nothing works...and people assume that the problems will magically be fixed if they are given more control.

I think the lack of investment is a side-effect btw. There is a massive issue in the UK with management, it stretches across government, the larger public sector, and the private sector. It is true that in regulated industries, regulators have created bad incentives for the private sector, this is true generally of the incentives that government creates for the private sector...but even outside of those areas, it is generally quite bad. One of the sources of this problem is the complete and total obsession with politics outside of the outcomes that it creates i.e. the purpose of politics is politics, not running things effectively.

There is no real way to fix this (and we have done almost everything possible to make it worse).

but privatization makes that worse, by adding profit-seeking (which tends to minimize investments) to the lack of effective governance

the solution is improving governance and public investments, not privatization

(not to mention the problem with infrastructure paid for by the public over decades being sold off on the cheap to private companies who can reap the benefits thereof)

Same for fiber infrastructure, running fiber into a desolate town may not be profitable but giving the chance for some kid in that town to build the next unicorn from his home benefits the entire nation. Not all talent is in the cities.

And they actually continue to expand their service.

[1] https://en.wikipedia.org/wiki/Farebox_recovery_ratio

For some reason things that happen in the air seem to privatise much better than things that happen on the ground.

MG might be the exception, but it’s a bit of a weird situation in that it went from being owned by a loss making British state owned enterprise (Leyland) to being owned by a loss making Chinese state owned enterprise (SAIC). Still makes popular, cheap and not very reliable cars though.

British Telecom lost its monopoly around the same time it was privatised. Is today's (very competitive) telecommunications market more a result of privatisation or of the loss of BT's monopoly?

Another way to look at it would be, are BT's customers better off now, than when it was a government company?

https://mdta.maryland.gov/Partnerships/tp3Overview.html

I don't know enough to say if Seagirt is considered a success but I do know Baltimore's port does very well. The Purple Line is/was a failure.

I think many of the telephone operator privatization worked pretty well in most places and buildup of user business for those companies and more competition, mostly from formerly public operators competing in other markets. But it also depends on the country.

Some of the airline privatization seems to me also sensible.

In my country (Switzerland) government owned some banks or partly old them and sold some stock in them, witch seems sensible to me.

Some water infrastructure was privatized and regulated in many countries and for the most part this has worked fine, maybe not in Britain.

Denmark seems to have done quite a lot of privatization and it was mostly considered pretty well done.

I was really surprised how much of this was done all over Europe, often by 'left' governments. Once you start researching you find more and more.

Would be the work for an economists thesis or something to try to do a full accounting of this across all European nations.

The privatisation of BT meant that there was no specific monopoly on ISPs during the Internet boom. While the privatised BT had a monopoly on the wires - customers could choose from hundreds of different dial-up and, later, ADSL ISPs.

Similarly, the privatisation of the mobile phone networks means that the UK had some of the cheapest airtime contracts in the EU. Yes, there are still gaps in network coverage, but there were at the peak 5 different MNOs for customers to choose from each competing and driving down prices / increasing coverage.

Energy has been mixed. Companies like Octopus have provided things like real-time electricity APIs. I can't imagine an organisation like British Gas launching something like that. Similarly, if your power supplier has crap customer service, you can move. And people do! In that sense, it has been a success.

Pickfords was also privatised. People forget that house-moving companies were nationalised during WW2. The liberalisation of that market has been a success.

You can argue about things like Rolls Royce, BP, British Airways etc. But I don't think they offset the utter failures of privatising water, trains, etc.

Apparently South Korea is doing pretty well with its healthcare: financing is public, service delivery is private (but heavily regulated).

There are legit reasons to be skeptical of privatization, but yes. It works well when it works.

Dogmatic responses (free market == everything, only government and unions can provide service) are not helpful.

I'm not against taking these things away from government but it might be better to have a non-profit that isn't as directly controlled by the whims of politicians. Independent similarly like the Bank of England with very clear metrics/goals on how to run the company.

If you lease a road or school for 20 years, it doesn't show up as debt in your books, which the city has made necessary for itself, because it has saddled budgeting framework with some arbitrary debt caps that are constantly at the limit.

This can be sold as a success story depending on how it's told - it lets you get the school you need after all (even if it's wasting money vs doing it the normal way). And it's making the participating companies great profits, just don't mention whose pockets it comes out of.

water/electricity/gas have been abject failures

railways have been a mixed bag

some things are better (quality of service is much better), some things are worse (subsidy and cost)

but a good chunk of that is under direct government control, and has been for a very long time

the only private bit is/was the TOC, "train operating company" (and roscos... which are another subject)

TOCs essentially just put a driver in the cab, and collect the fares and send them to the government

they don't maintain the track, they don't set the fares, they don't set driver pay, they don't control the service pattern

if your train service sucked during the last few years: it's probably the government's fault

Imagine having one mobile phone provider.

Both Airbus and Volkswagen were set up by Governments. T-Mobile is arguably quite successful.

Extreme absurdities included hunting whales to fulfil production quota, then dumping carcasses into sea as they were not needed for anything. Some species were hunted into extinction this way, for no benefit whatsoever.

The challenge with so many UK privatisations is that the idea of real alternatives/competition ranges from laughable to extremely laughable.

1. Internet Service Provision

Britain chose to separate the intrinsically geographic monopoly of Last Mile Copper Loops from its existing non-intrinsic monopoly telephony provision. British Telecom, which had once been publicly owned, was obliged to distinguish "BT Openreach", the part of their company which inherits the local loop monopoly and which also offers (non-monopoly) long distance network transit and other useful stuff - from the consumer facing BT, which is a fairly ordinary PLC. I know a BT employee, the regulators really care that they can't collude with Openreach.

This means that the tiny company providing my Internet access (Andrews & Arnold) doesn't need to own a large brick building down the street, or even a cabinet in that building, or negotiate a deal with a monopoly behemoth who can set their own terms unfairly. Instead, they pay Openreach to move packets from my home to a nearby city, and then they can choose to pay Openreach or its competitors to move those packets from the city to their routers. BT Openeach is a monopoly, but it's an ordinary public company just with a lot of regulations to ensure it behaves equally for A&A as it does for its owners BT. BT isn't a monopoly but it does have lots of customers, I think its services are crap or alternatively that they're too expensive (A&A is more expensive but much, much better, if BT were much cheaper than they are maybe that's a good deal for somebody)

This arrangement means most UK residents have dozens of potential reasonable ISP options, with a range of pricing and terms, including lots of "All you can eat" type packages, even if they don't live in a big city. People like me who do live in a big city get slightly more options (a Cable TV company, a local fibre startup), which can go cheaper and higher bandwidth, but only a few people are stuck with a single practical option as is common in the US - basically only people in very rural areas, and usually their option is community owned, so it may not be cheap but it's at least owned by actual people who might care.

2. Energy

Britain separately privatised the gas and electricity supply. Now on the surface this is lunacy because of course that's a geographic monopoly. But they're not complete idiots, so what was actually privatised was mostly the customer service/ end user billing part of the problem. My gas and electricity come from the same place as my neighbour, inevitably because they're the same pipes and wires, but my bills and my customer service are from my choice which happens to be Octopus.

Does this achieve anything useful? Eh, maybe. I don't think a local energy monopoly would be anywhere close to as good at either customer service or billing. Octopus seem to have some idea what they're actually doing. On the downside these firms have ended up costing tax payers a bunch of money because of course when one goes bust the gas and electricity are still working but the government is on the hook to ensure somebody else handles billing them for it and that's complicated. This happens far too often when there is stress on the financials of these firms e.g. the Ukraine situation fluctuated energy bills with little notice.

Edited: fix s/citizen/resident/ what matters isn't your passport but where you live

Yes, but it depends on how/why things are done. You don't hear about the successes because it's not a story worth telling.

Charter schools are a good example. They have mixed success when deployed. In many places they're deployed by right-wing politicians primarily to weaken public schools (and their unions). This can be done via a variety of ways, such as letting the charter schools charge extra (thereby essentially subsidizing private schools), allowing the schools to "expel" problem children, thereby dumping the public system with them, etc. The result is usually a framework that isn't designed to actually make education better.

In some places (Sweden is a good example), charter schools were implemented by a centre-left government because all attempts at school reform failed due to a variety of reasons. The result was by most measures successful as the charter schools couldn't pick and choose kids, were still held accountable, and it resulted in the public schools having to stop fighting reform in order to sort of compete.

The Canada line in Vancouver (metro link to the airport) was build on time and on budget and is still run by a P3 company, as is the new REM line in Montreal. The incentives here were ONE company was given a contract with clearly laid out incentives and minimal political meddling after that (as opposed to other P3s where the government is highly involved and subcontracts, etc get doled out to connected firms, etc).

The UK car industry was mostly privatized, but judgement on its post-privatization failure mostly goes down political lines (eg should a government continue to subsidize poorly made cars in the name of employment). Same with most of the rest of industrial Britain, which under public ownership was uncompetitive in most cases. That being said, most would consider Rolls-Royce to be successful and was privatized in the 1980s.

BP's privitization was mostly a success, even with all its issues.

Canada privatized CN rail and it is now one of the most efficient freight railroads in North America.

Telecom privatization in the EU has mostly been a success (though one could argue that the EU has pushed for too much competition, which has meant that while mobile prices are generally very low, it has made it harder for companies to invest).

Many airlines outside of the USA were also publicly owned pseudo-monopolies. Flying is cheaper than it's ever been, even if no longer glamourous.

The TL;DR is of course it's a mixed bag and depends on so many factors. Many UK industrial firms were so poorly run under private ownership that they were so far behind they couldn't catch up and compete once privatization did happen.

My understanding is that in the US Amtak runs a net-positive operating income in the Northeast Corridor (Boston-NYC-Philly-DC) but it all goes toward subsidizing unprofitable routes throughout the rest of the country. To the tune of the entire system running a $2 billion loss every year.

So in theory you could get some private rail to run trains up and down the northeast seaboard, upstate NY, Long Island, and possibly come out with a net profit.

That to me is insanely cheap. Surely fuel would be like 45 EUR, not to mention the cost of parking in Amsterdam?

Maybe it's just because a similar journeys in the UK (Manchester to London) would be about 130 EUR.

(Assuming I've understood correctly - you pay about 6 EUR a month for Flex Dal Voordeel and get a 40% discount right?)

(1) Most tourists visit largely London and its near surroundings. Public transport in (and to) London is generally much better than other parts of the country.

(2) A lot of the downsides don't manifest if you're a relatively infrequent user and you're largely travelling at off-peak times. As a UK resident who doesn't commute on the railway, this also includes me -- my experience of trains is generally good because I travel at quieter times and I don't travel so often that unreliability is a regular experience.

(3) If you ignore the costs (by not being a taxpayer or because you're less price sensitive for infrequent travel and especially for holiday travel), then you're ignoring the large part of the argument which is "this privatization had massive inefficiencies and costs".

FWIW, the UK government pays about half of the 25 billion/year cost of the "operational rail industry" (source: https://dataportal.orr.gov.uk/statistics/finance/rail-indust...). I couldn't find the equivalent stats for Portugal with a quick search, so I don't know how that compares.

Most complaints in the UK are about cost of tickets. They are very valid complaints imo, the cost of getting a train in this country can be absurd. There would be a really positive attitude towards train travel in the UK and our rail system if it wasn't trying to bankrupt you every time you use it.

Trains get delayed and cancelled very frequently. They leave you stranded in the middle of nowhere because there's a technical issue fairly regularly: it's not a daily occurrence, but it's frequent enough that people will just go "ahhh classic british rail".

Trains are often packed, with literally nowhere to sit for hours-long journeys.

And this poor quality of service is very expensive. I know adults in their late 20s - early 30s with a fulltime job that choose to take the coach even though it's twice as long, because it's much cheaper. An ex-colleague was living outside of london, and spending £16k a year on train for commuting (you'd expect a big bill, but £16k is insane).

I'm sure there's plenty of countries that do worse, and as an infrequent traveller you'd probably be fine, but it's just... not great

As someone else mentioned, London (and really urban commuter services in general) are essentially separate; the problems are _primarily_ around the regional/intercity stuff.

One specific consequence of the privatisation. Earlier this year I visited Manchester. The airport to city route is operated by _two_ rail operators, on the same line. You buy a ticket for one service or other. I bought a ticket for operator A because their train was next. A few minutes later that train was cancelled, so I had to watch as a couple of operator B trains passed and wait for an operator A train.

I mean, no-one can tell me that’s a sensible way to run a railway.

(Mind you, this still beats Dublin airport, which currently has no rail at all, and under current plans will have _two_ separate rail lines around 2040-2050, and maybe a tram. Though, if that happens, at least the same ticket will work for both…)

As a whole though, at least out of major cities London, Edinburgh, Glasgow, and Manchester, the rail system is great.

Every year without fail this goes up by a noticable amount, but the service is still unreliable. Looking back at my travel history, the train has either been late to arrive or late to get to my destination around 30% of the time. That delays can vary a lot as well between about 10mins (this morning for example) to 30 minutes on average.

But that's the average picture, the winters get so much worse for my route. There's a tunnel just before our station which frequently has water pouring through when it rains heavily which means no trains can run until it stops. Several times I've left my house with all the trains listed as running on-time and arrived at the station to be told by the (very nice) guard that he doesn't expect there to be any trains through until mid day.

They also get very crowded, at least on my route. They're meant to send a 3 carriage train but will frequently end up with only 2 carriages because they had a problem with one of them. This usually delays people boarding which means the resulting journey is around £8.40 for no seat and a 10-15 minute delay.

The UK rail sure isn't the worst in the world by any stretch. When a journey goes well it's seemless and I'm a big fan. But a lot of the time it feels like you're being bent over, especially when after several weeks of reduced services due to strikes you're suddenly met with a price hike of 5% with no improvement in the services reliability. All of that is just when you're talking about commuting as well. Any time I'm forced to head to London it's a miserable emptying of my wallet.

All of this is just my daily experience, but I'm so sick of this failed experiment. Each year it costs more, the service is just as unreliable, and the profits all leave the UK.

Maybe my expectations aren't reasonable, but it's something I'm effectively forced to use daily because of house prices.

To get that price, I've always had to change at Crewe, or buy well in advance. Otherwise, it's £114 return.

There are EU competition rules that require separating operations from infrastructure, but it is and always has been fine to do this as separate divisions under the same publicly owned umbrella.

There is no public transit system where fares cover all the costs, never mind generating a profit. Riders would refuse to pay a fare high enough to do this.

Airlines barely make a profit. I'm not sure about intercity rail globally but in the USA, Amtrak relies on government subsidies to operate. All the private railroads gave up passenger service decades ago because it was unprofitable in the face of new competition (i.e. cars and air).

Local bus and light rail service will never be profitable as a private enterprise. We'll see what happens once drivers can be eliminated, but I'm still doubtful. Plus the public will still want some sort of authority figure on the bus or train. It's one thing to feel safe in a Waymo where you're not sharing the vehicle with 20 strangers but a bus or subway is different. So trade driver for security/customer service person and you're not really saving on payroll.

OK? Capitalism works because of the evil businessmen not in spite of them.

I'm sure Gregg's could put rats in the sausage rolls if they wanted to but suspect it wouldn't do much good for their footfall

Where I think privatisation went wrong (the core concept of having private operators bid on franchises is ~right imo) is the state lost a lot of 'management' knowledge that was in British Rail. This has really killed us because we don't know how to build complex civil engineering projects anymore, and _the management_ of them gets outsourced to large contractors like Arup at eye watering costs.

They also have a terrible conflict of interest as if they manage it well, they often get paid much less than managing a slow moving disaster of a project.

I think this needs to be solved first, not getting the state to operate train fleets.

Affordability is really driven by how much the operators are subsidized by the govt. It's hard to calculate this on a like for like basis as some subsidy goes to the track operator and some to the train operator, and in eg Germany you have a hugely complex set of subsidies and fare zones in operation from various levels of government.

I don't expect the other European systems to be any cheaper - it's just hidden in the tax system instead.

Where the UK shines imo is two things. 1 is the frequency of many services. It's rare to have less than 2 trains per hour on an intercity route, and often far more.

This compares to France (outside TGV) which is atrocious. Non regular timetable with often 2-3 hour gaps on trains.

Spain (even on the high speed lines) is even worse. Some _high speed lines_ can't even manage an hourly service. This has got far better recently on high speed lines with private competition, but outside of that the timetabling is terrible.

The other is some of the ticketing options. Firstly, there is a no questions asked delay repay feature which means you get a substantial portion of the ticket refunded if there is any delay for any reason, starting at a 15minute delay. Obviously no delays are better than a refunded one, but I've had some atrocious delays in mainland europe and no option to apply for a refund.

The other is no composlary reservations (though I'm not sure how long this will last). If you have a valid ticket, you can get on. In many EU countries if a train is out of seats you don't even have the option to buy a ticket and stand. Combine this with poor timetables on many routes and it can cause huge problems if you are travelling at short notice.

Netherlands and Switzerland good for sure - better than the UK I would say. But Germany/France/Italy/Spain have a lot of issues.

You won't have to wait long: flying. Shocked? You shouldn't be. In the 70s, you'd have to pay thousands of dollars to fly across the country. Now you can get a flight between NYC and London for $200.

Time to retract your entire little rant.

Should Tesco be run by the government? I use Tesco more than I take trains.

May be of note also that the best train in London (the Elizabeth line) is run by a tendering process

Did it?

https://en.wikipedia.org/wiki/File:GB_Rail_Subsidy,_1985-201...

paints a slightly more complex picture.

Things really went downhill after 1773 (first Inclosure Act)