The British Labour Party has what it thinks is a great idea: renationalize British rail operations. These were semi-privatized in the 1990s, leading to a huge increase in rail ridership–especially relative to passenger rail on the continent, where ridership is stagnant.
The Labour Party is following that quaint old socialist idea that profits are a waste and that government takeover would allow those wasted profits to be diverted into reduced fares and better services. They claim that nationalizing “would mean hundreds of millions currently lost in private profit would be available to fully fund a bold offer on rail fares.”
If this were true, then Amtrak, the New York Metropolitan Transit Authority, and pre-priviatization BritRail would all have generated plenty of revenues to fund their operations and maintenance. But they didn’t and don’t; instead, they require huge subsidies and even then offer poor service due to unfunded maintenance backlogs.
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