My ideas for a British company to compete in Europe

[northwichcat]

Relating to companies part state owned companies bidding for franchises in Britain such as DB Regio (parent of Arriva) and SNCF. Should our government take part ownership of a rail operator and start bidding for work in Europe?

National Express or Serco would seem to be the most sensible options for the state to take part ownership of.

 

[HH]

National Express or Serco would seem to be the most sensible options for the state to take part ownership of.

Why these and not First or Stagecoach?

But in any case let me posit a different criterion. The companies that the government should support should be those who do the most for our economy, no matter who owns them. Maybe that's the same as to where the company is registered, but I suspect not.

 

[northwichcat]

Why these and not First or Stagecoach?

National Express have been involved in the running of Eurostar while there could be other benefits from Serco being part state owned given the amount of work they do for the government.

The companies that the government should support should be those who do the most for our economy

Agreed. First and Stagecoach don't seem to fit that bill when both are only really interested in transport operations that make healthy profits, both are happy to sell off parts that aren't making much money.

 

[ainsworth74]

Should our government take part ownership of a rail operator and start bidding for work in Europe?

Why? What would be the advantage to us the taxpayer (seeing as we're the ones that would be paying) and country?

 

[Yew]

Why? What would be the advantage to us the taxpayer (seeing as we're the ones that would be paying) and country?

I suppose, they would go to subsidise the taxpayer. But is that likely to happen? and due to the slim margins in railways, is it the best choice?

 

[northwichcat]

Why? What would be the advantage to us the taxpayer (seeing as we're the ones that would be paying) and country?

The French and German governments are making profits from the subsidies they run in the UK, while we are losing money on the railways and helping fund the French and German states in the process.

First and Stagecoach have North America operations but Britain sees like benefit from these - apart from a few British directors of those companies.

 

[DarloRich]

http://www.networkrailconsulting.co.uk/

it appears to be happening already!

 

[kylemore]

The French and German governments are making profits from the subsidies they run in the UK, while we are losing money on the railways and helping fund the French and German states in the process.

First and Stagecoach have North America operations but Britain sees like benefit from these - apart from a few British directors of those companies.

What - and the Germans don't drink lots of Scotch Whisky and British architects don't build German buildings etc etc?
The Germans are experts at running railways and therefore that's likely to be "exported" while we're experts at various other things (amazingly still) like architecture and making Whisky (I'm sure there's more!) which we make money exporting to them.
The German rail system is open for private investment, albeit in a different (better?) way, UK companies are free to try their luck, why moan when the Germans take advantage of the situation which the UK govt has created?

 

[northwichcat]

What - and the Germans don't drink lots of Scotch Whisky and British architects don't build German buildings etc etc?

The UK paid £41,107M for German imports in 2011 (more than we pay any other country) and Germany pays us £27,539M for what we sell them. That weights strongly in the German's favour.

http://www.guardian.co.uk/news/datablog/2010/feb/24/uk-trade-exports-imports

Also it's not the German government buying Whisky for the German public but it is the UK government buying trains off Siemens for the UK public etc.

The Germans are experts at running railways and therefore that's likely to be "exported"

The Swiss would be considered even better experts at the railways and they don't seem to get much off us.

 

[dggar]

The UK paid £41,107 for German imports in 2011 (more than we pay any other country) and Germany pays us £27,539 for what we sell them. That weights strongly in the German's favour.

http://www.guardian.co.uk/news/datablog/2010/feb/24/uk-trade-exports-imports

Also it's not the German government buying Whisky for the German public but it is the UK government buying trains off Siemens for the UK public etc.



The Swiss would be considered even better experts at the railways and they don't seem to get much off us.

Are you missing a few zeros here? £27,539 is about what is quoted as the average wage.

 

[Tiny Tim]

Directly Operated Railways are excluded from bidding for franchises in this country. Could they bid to run trains elsewhere?

 

[kylemore]

The UK paid £41,107 for German imports in 2011 (more than we pay any other country) and Germany pays us £27,539 for what we sell them. That weights strongly in the German's favour.

http://www.guardian.co.uk/news/datablog/2010/feb/24/uk-trade-exports-imports

Also it's not the German government buying Whisky for the German public but it is the UK government buying trains off Siemens for the UK public etc.

.

Ok but is that the German's fault?

There should still be a Strong British Railway engineering sector indeed a strong manufacturing sector generally ie a "Real" economy.
However every UK govt since 1979 has disagreed (their actions, forget their words).
It's our fault this is happening.

 

[Simon11]

Seems to be plenty of daily mail readers here.... German railways aren't completly better than uk railways and not all toc are actually making any money.

You may be surprised but db mostly just let arriva trains get on with it. There have been plenty of times where uk tocs have been advising db on how to improve in different functions. In some areas of the business, uk tocs are better than db.

 

[northwichcat]

Are you missing a few zeros here? £27,539 is about what is quoted as the average wage.

The column header had (M) which I missed when copying and pasting across. I've corrected it now.

Ok but is that the German's fault?

I didn't say it was. I'm saying we're not effectively competing with other countries like Germany.

 

[ainsworth74]

There should still be a Strong British Railway engineering sector indeed a strong manufacturing sector generally ie a "Real" economy.
However every UK govt since 1979 has disagreed (their actions, forget their words).
It's our fault this is happening.

The manufacturing sector of the economy was more valuable in 2009 than it was in the 1950s. A smaller percentage of the overall economic pie but a much much more valuable part of it.

 

[kylemore]

The manufacturing sector of the economy was more valuable in 2009 than it was in the 1950s. A smaller percentage of the overall economic pie but a much much more valuable part of it.

But where are the jobs?

Ok lets take your argument to ridiculous lengths - if in 2012 our manufacturing consisted only of a 1000 workers building a solid Gold locomotive and we managed to sell it for more than the total price of all manufactures in 1960 say, then you could logically argue that our "manufacturing sector" was "greater" in 2012 than in 1960!

Daft I know!

But it illustrates how statistics don't tell the whole story

 

[northwichcat]

But where are the jobs?

People have been replaced by robots.

People probably use their bank accounts more now than they did before ATMs and Internet banking but I imagine the number of customer facing bank staff have declined.

 

[tbtc]

The French and German governments are making profits from the subsidies they run in the UK

Allegedly the German taxpayer are subsidising DB's loss making Cross Country services, to the benefit of the British taxpayer*

(* - i.e. people who live here and pay tax, not that Branson chap)

 

[jon0844]

People probably use their bank accounts more now than they did before ATMs and Internet banking but I imagine the number of customer facing bank staff have declined.

Absolutely. I despise going to my bank. I go in to pay money in and the poor man/woman at the desk is forced to ask if I want anything else (and not being told the time, but something like an overdraft, account upgrade, credit card, financial review etc).

It's as annoying as going into WH Smith and being asked if I want a bar of Galaxy chocolate for £1.

I have similar feels for the post office, although at least our local post office has been rebuilt and the staff are now incredibly happy and helpful - compared to the people before that seemed like they wanted to kill themselves (and I'd have happily assisted them).

I do fear for future generations (including my son that will enter the job market around 2030) in terms of what jobs there will be, as technology means there's less need for face to face contact. It's fair to say that the railway will see massive changes. Most people will always want a driver on a train (just as they will on a plane) even if computers can operate both.

But besides the sight of security guards to make people feel safe, I can see that ticket offices won't be needed as we are getting very close to being able to live in a cashless society. Contactless payment cards, or even SMS, can be used to buy things from vending machines, so I am not sure of what will be left that needs cash... and future generations won't have those sentimental feelings about losing it.

 

[HH]

I agree; Ticket Offices, except possibly those at large termini, will soon be a thing of the past. Owning groups would like to keep (most of) the staff and make them more customer service oriented, but with the focus on (so called) value for money, will they be able to?

 

[jon0844]

Ultimately, we the people will have a chance to stop things happening - but will we, when all we want is cheaper prices?

Let's take an example of something that could happen. You want to go out to watch a movie. At the moment, you can book your ticket online and pick up from a machine. Then you show your tickets to someone to go in, and can see staff to buy food/drink. There's probably someone to stand near the screen to deal with things too.

But, why not get rid of the staff - besides a small element to comply with the law for an evacuation. Buy ticket on mobile, swipe phone against entry gate. Use contactless card to buy food/drink from a vending machine - or pick up the items that have embedded RFID tags and as you walk towards the screen, you're charged electronically for what you've bought.

Now you go in to the screen and if you have a problem, you can use a help point or communicate via the same app you bought your ticket from. All of the cinemas in the chain are managed remotely from an operations centre that's not UK based - where they can remotely watch what is going on in every screen (to look for fights, people filming etc).

Now use the same new technologies, or emerging technologies, to work out all the other low-skilled, part-time jobs that can be wiped out easily in the service industry, retail etc.

It's quite depressing, but as I say - we could stop it happening by refusing to accept such changes.. but we won't, at least not until it's too late.

 

[kylemore]

And somebody is going to have to come up with a plan for the painless and hygenic disposal of all the useless eaters we're going to end up with

 

[ainsworth74]

But where are the jobs?

Daft I know!

But it illustrates how statistics don't tell the whole story

Perhaps but I'd reject the idea that just because we don't employ as many people in manufacturing as we once did we do not have a strong/important/valuable manufacturing sector. Everyone likes to talk about how we don't make anything in this country any more, that's clearly wrong, we just don't employ as many people doing it.

Furthermore I'd also suggest it's a tad simplistic to suggest that the sole reason for the loss of manufacturing jobs is government policies post 1979, I'd argue some of the root causes lie back in the 1960s and 1970s but that's probably for another thread

 

[kylemore]

Furthermore I'd also suggest it's a tad simplistic to suggest that the sole reason for the loss of manufacturing jobs is government policies post 1979, I'd argue some of the root causes lie back in the 1960s and 1970s but that's probably for another thread

You're right ainsworth the rot had started long before (by the way if you've not already read him the works of historian Correlli Barnett are very illuminating).
However the forces behind Thatcher almost gleefully accelerated the process in the interests of a minority rather than trying to reform the economy in the interests of the British people as a whole.

 

[LNW-GW Joint]

Allegedly the German taxpayer are subsidising DB's loss making Cross Country services, to the benefit of the British taxpayer*

(* - i.e. people who live here and pay tax, not that Branson chap)

Arriva Trains UK (includes ATW, XC, CH franchises; not sure about LOROL or GC) lost €29m (EBIT) according to the 2011 DB annual report.
Arriva as a whole (includes UK buses and the European ops) made €160m profit on the same basis.
http://www1.deutschebahn.com/ecm2-db-en/ar_2011/gmp/units/passenger_transport/dbarriva.html

So DB is subsidising its UK franchises rather than the other way round.
The few words of comment show ATW performance as "satisfactory" but XC and Chiltern as "weak".
I doubt if DB are happy with their UK rail investment.

 

[northwichcat]

Arriva Trains UK (includes ATW, XC, CH franchises; not sure about LOROL or GC) lost €29m (EBIT) according to the 2011 DB annual report.
Arriva as a whole (includes UK buses and the European ops) made €160m profit on the same basis.
http://www1.deutschebahn.com/ecm2-db-en/ar_2011/gmp/units/passenger_transport/dbarriva.html

So DB is subsidising its UK franchises rather than the other way round.
The few words of comment show ATW performance as "satisfactory" but XC and Chiltern as "weak".
I doubt if DB are happy with their UK rail investment.

I don't understand. If overall Arriva is making a profit then no money from parent company DB Regio is needed to plug a shortfall, so the German's aren't subsiding our train services. Although, if the UK buses profits don't cancel out the UK train loses then possibly profits from Arriva's operations in countries like the Netherlands and Malta might be used to wipe the rail debts.

Also DB's UK investment includes DB Schenker's freight operations - the former EWS operations, although that doesn't come under DB Regio or Arriva.

 

[LNW-GW Joint]

I don't understand. If overall Arriva is making a profit then no money from parent company DB Regio is needed to plug a shortfall, so the German's aren't subsiding our train services. Although, if the UK buses profits don't cancel out the UK train loses then possibly profits from Arriva's operations in countries like the Netherlands and Malta might be used to wipe the rail debts.

Also DB's UK investment includes DB Schenker's freight operations - the former EWS operations, although that doesn't come under DB Regio or Arriva.

Well put it another way, DB is not profiting from UK franchises.
DB Schenker is separate, of course.
DB Regio does not now operate in the UK, it's all under Arriva.
Tyne & Wear Metro and the share of LOROL comes under Arriva Trains UK (also GC, Alliance and LNWR), as well as the three franchises.

 

[northwichcat]

DB Regio does not now operate in the UK, it's all under Arriva.

Yes Arriva's a separate company owned by DB Regio. Unless Arriva as a whole has financial troubles, then DB Regio don't need to subside it.

 

[LNW-GW Joint]

Yes Arriva's a separate company owned by DB Regio. Unless Arriva as a whole has financial troubles, then DB Regio don't need to subside it.

No. DB Regio is restricted to Germany, and Arriva reports directly to the DB group board.
I think you keep misunderstanding my point about Arriva's rail franchises.
They are not performing as well as DB expected (plus no new ones).

 

[northwichcat]

No. DB Regio is restricted to Germany, and Arriva reports directly to the DB group board.
I think you keep misunderstanding my point about Arriva's rail franchises.
They are not performing as well as DB expected (plus no new ones).

But that doesn't mean that DB are directly paying off any loss in the Arriva XC franchise which was the suggestion in the post you quoted earlier on where you went on to explain the finances of the different railway companies that Arriva have.