"I don't see this as a step backwards into some sort of BR or public sector-type environment," she said. "It is a commercial company that happens to have the government as its owner."
Holt admitted that East Coast will impose the above-inflation fare hikes that National Express was planning for January, even though the new business will not have to meet the franchise payment of around £180m next year that helped derail the route's former owner. "I am not going to sit here and say that just because we are a government-owned company we are going to slash fares."The principle of attempting to run a state-subsidised universal-service system such as passenger rail as a for-profit enterprise makes little sense. If railways are a system the government has to pour taxpayer funds into to keep it operating (and has sound reasons to do so, with the availability of bulk passenger transport stimulating the economy and the welfare of its citizens in a way that a completely user-pays system could not), why privatise parts of it and have a chunk of the money that goes into the system bleed out into the pockets of shareholders? Surely whatever efficiencies private ownership brings to the table (and those Reaganite/Thatcherite articles of faith are looking increasingly shaky these days) could be achieved by less costly measures.
In any case, it seems that the government will pocket a windfall from the inflated ticket prices and lack of franchise payments. Let's hope that, short of using it to make rail travel more competitive on price, they use it to fund improvements to the rail network (such as, say, bringing forth the electrification of intercity rail lines before the existing diesel trains need to be replaced and the price of oil goes up any further), rather than just trousering it.
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