By Geoffrey Smith
August 24, 2016

Well, that escalated quickly.

British billionaire investor and philanthropist Sir Richard Branson has found himself in a bad-tempered spat with the U.K.’s answer to Senator Bernie Sanders over the state of Britain’s rail industry, much of which is controlled by Branson’s Virgin Rail Group.

Labour Party leader Jeremy Corbyn lashed out at Necker Island’s most famous resident at a press conference Wednesday, threatening to confiscate Virgin’s franchises to run two of the most important intercity routes in the U.K. in the (unlikely) event of him being elected Prime Minister.

“I’m very pleased that Richard Branson has been able to break off from his holiday to take this issue seriously with the importance that it obviously deserves,” Corbyn said with heavy sarcasm. “I hope he’s very well aware of our policy which is that train operating companies should become part of the public realm, not part of the private sector.”

Corbyn was responding to the way Branson called him out over Twitter on Tuesday for making false claims about overcrowding on one of Virgin’s express trains from London to Newcastle. The patrician socialist had filmed a short piece to a hand-held camera while sitting in the entryway of a carriage, claiming that the train was “ram-packed” and that he had nowhere to sit.

“The reality is, there’s not enough trains. We need more of them,” Corbyn said. “And they’re also incredibly expensive. Isn’t that a good case for public ownership?”

Awkwardly for Corbyn, Virgin Trains then issued CCTV footage showing Corbyn walking past empty, unreserved seats as he boarded the train, and also taking a vacant seat just after he finished filming, which he kept for the remaining two hours of the journey.

Branson appeared to undermine his own case by tweeting a picture where the empty seats are clearly marked by ‘Reserved’ markers (although Corbyn would have been perfectly free to sit there until the reserving passenger turned up). However, other stills from the footage show Corbyn walking past clearly vacant seats as he boards, suggesting that Corbyn’s clip was filmed by choice rather than necessity.

The inconsistency was gleefully jumped on by a U.K. press corps that is solidly anti-Corbyn. (The Tory press and Rupert Murdoch’s Sky News are again him because he stands for everything they loathe; the BBC and The Guardian because his hard-left policies are badly hitting Labour’s poll ratings). Even the normally loyal Daily Mirror quoted Chris Bryant, a senior Labour lawmaker expressing dismay, not so much at the claim itself, but at the fakery involved in making it. Corbyn won the Labour leadership last year largely due to the perception of his ideological purity and being above the dark arts of spin.

“Everybody has had to sit on the floor on a train at some point—but for Jeremy to go and pretend will get up people’s noses more than anything,” Bryant told the Mirror.

They might despair at the incompetence of a politician who has to fake a crowded train experience, but few people in the U.K. would argue with Corbyn’s basic premise that overcrowding and high fares are a major problem. A series of strikes by drivers and guards at Southern Rail, which operates some of the busiest commuter routes into and out of London, has left thousands stranded or late for work on almost daily basis in recent weeks, exacerbating the company’s already patchy performance.

There’s even a high degree of support for his proposed remedy of nationalization, particularly among those who don’t remember the misery (think Dante edited by Kafka) that was U.K. train travel before privatization in the 1990s. Just under 60% of respondents were in favor of nationalization, according to YouGov’s last poll (admittedly back in 2014).

Even Conservative voters backed the idea by 48%-35%, although a cynic would argue that this is because that they’re concentrated around London, and are the worst affected by high prices and capacity constraints.

But lower prices and more capacity can only come at the price of much higher government subsidies. Given that 59% of all rail journeys in the U.K. either begin or end in London, that effectively constitutes a subsidy to the richest part of the country from taxpayers in poorer parts of the country. According to research by the OECD, Deutsche Bahn and others, the U.K.’s rail sector has by far the lowest level of government subsidy in Europe—an estimated 7 euro cents per passenger-kilometer. That compares to 16 cents in France, 18 in Italy and 21 in Germany. Matching the German level of subsidy would cost the U.K. an extra $9 billion-plus a year, according to Fortune calculations.

 

Source: The Office of Rail and Road

The problem with the U.K.’s trains is that, for a variety of reasons, they can’t add capacity as fast as demand is rising. Again, the figures are striking: the amount of passenger-kilometers traveled by rail rose 37% in the decade from 2006-2015, according to Eurostat, more than double the rate of growth in France and Germany and over five times that of Italy. As uncomfortable as the experience often is, privatization has persuaded more people to use the U.K.’s trains after decades of stagnation, at a best-in-class cost to the taxpayer. Brits nostalgic for the ‘good old days’ of state ownership should reflect on that.

 

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