Ghastly bastards

Now that Virgin Trains is out of the running on west coast after refusing to back a multibillion- pound deficit in the rail staff pension fund,

That’s the Observer.

The actual thing being that there are pension deficits. And how much should the franchisee be responsible, the franchisee running the trains today and tomorrow, for the deficit run up yesterday?

Roughly, the government’s position is that we’ll let you know. The potential franchisee’s is that we need to know today so as to be able to bid the right amount – the right amount obviously including whatever past pension costs we’re going to be asked to cover.

That not being the way The Observer covers it – the bastards.

This lack of consistency has, largely, benefited the private sector, while simultaneously undermining the rationale of the franchising system. Virgin and Stagecoach were stripped of the east coast franchise last year after admitting they could not meet the promised £3.3bn in contract payments, but were under no obligation to meet that forgone financial promise. It was the third time in 12 years that a private operator had been removed from Britain’s most prestigious rail route after failing to deliver the billions of pounds they had promised to the taxpayer.

Neither of these cases sparked much of a public outcry because, in reflection of what matters most to passengers, safety and punctuality records on east coast have not been disastrous. This is thanks to a UK-wide, multibillion-pound investment programme underwritten by the state and carried out by Network Rail, the government-owned operator of tracks and stations.

The reason they wouldn’t meet the payments? Network Rail was late – again – on that promised upgrade of the line.

Bastards is too mild, isn’t it?

6 thoughts on “Ghastly bastards”

  1. “Neither of these cases sparked much of a public outcry because, in reflection of what matters most to passengers, safety and punctuality records on east coast have not been disastrous.”

    No outcry from me because the base salary for a train driver on GWR is £51K. The base salary for a bus driver on Stagecoach is £23K.

  2. Major (Socialist) botched privatisation of BR by

    Not ending de-facto closed shops
    Selling monopoly franchises instead of free market airport style slots

  3. Actually the East Coast route is pretty reasonable. Compare Leeds-KX fares against Manchester-Euston and they’re often cheaper than half the price. Funnily, the East Coast route is also the one in the country where there’s competition (from Grand Central and Hull Trains). But that’s got to be a coincidence, centralised planning and regulation by the state is *soo* much better because reasons.

  4. Agree with Matt. Frequent users of the East Coast line here – with the proviso that we’re almost always able to book weeks in advance – and the service has been really very good under both Virgin and LNER. Hull Trains have had their problems but should now be resolved with new Hitachi rolling stock.

    Anybody wanting a return to nationalisation / public ownership clearly hasn’t visited a Post Office recently, and doesn’t remember the 70s / 80s.

  5. (Damn, forgot) As for the pension deficit, like all pension deficit calculations it simply reflects that at some future point there may not be enough money to meet commitments, based on some very conservative actuarial calculations.

    An increase in interest rates, a few years of investment growth, and getting the regulators the hell out of telling pension funds where and when to invest, and the deficit would likely be history. But in that case would the people who pressed for some poor sucker to pile money in now be pressing for said poor sucker to be getting it back again?

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