In the last few weeks, the main news about the UK railways has been about the privatisation of the East Coast Main Line. I personally do not agree with privatisation of the railways. I think the Government now pays more in subsidies to the railways than it did when there was British Railways and British Rail! The Government did fail to invest properly in the railways when they were nationalised, which, in my opinion, contributed to the major accidents that occurred when Railtrack existed. On top of this, over 90% of the profits of the railways goes to shareholders! If the railways were still controlled by the Government, our economy might be slightly better because with the increasing passenger numbers (we are already matching the 1920 passenger levels), the railways are more likely to be profitable, which puts more money into the Treasury, resulting in less borrowing and more paying off debts.
Although I disagree with the privatisation, I believe the right company has been awarded the franchise. When the West Coast Main Line franchise process collapsed, regular passengers said that Virgin had done a good job with the West Coast Main Line. The winner of the East Coast Main Line is a joint bid by Virgin and Stagecoach (which owns 49% of the shares of Virgin Trains), with the train being branded as ‘Virgin’. Considering FirstGroup keeps losing franchises, I think the Government have made a good decision with awarding the franchise to Virgin/Stagecoach, despite my overall view.
As one last point, Sir Richard Branson once said that state-owned railways don’t work. Firstly, 75% of our railway franchises are operated by foreign state-owned railway companies and these companies are profitable. You only have to look at Deutsche Bahn (DB, AKA DB Schenker) to see this. If the Government invested in a state-owned railway, our railways would operate much better and possibly much cheaper than they do now.