The Economist 2012.11.24 by The Economist

Author:The Economist [The Economist]
Language: eng
Format: epub
Publisher: The Economist
Published: 2012-11-22T20:52:06.226000+00:00

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Railways

Gravy train

Why a popular, well-paid job suffers shortages

His driver is even giddier

FEW jobs that do not require a university education pay well. Fewer still offer reasonable hours and plum benefits. So it must be good to be a train driver. In exchange for 35 hours of work per week, drivers enjoy a generous salary, above-inflation pay rises and a hefty pension. Even before the financial crisis increased the appeal of such work, it was estimated that there were 317 applicants for every job.

So it seems strange that London Midland, a firm that offers more than 1,300 trains a day between London and north-west England, has had to cancel hundreds of trains since October owing to a shortage of drivers. More than 30 have apparently abandoned the line for better pay and conditions elsewhere. London Midland drivers earn more than £42,600 ($67,900) a year, but some companies serving similar routes offer £10,000 more. Training new drivers takes the better part of a year, and it will be weeks before London Midland’s schedule is back on track.

Oddly, trade unions—particularly ASLEF, which represents drivers—have become more powerful since privatisation in 1994. Short franchise contracts of five or six years discourage operators from battling unions over pay and conditions, as even a brief strike could wipe out the profits of a franchise term. Short-term contracts also make it hard to justify long-term, labour-saving investments, such as in ticket-selling and door-closing technology. And there is little political will to tackle labour costs. Although London Midland is known for being well-run, and the driver shortage is a result of union demands over training time and pay, politicians have threatened to strip the operator of its franchise.

Driving a train is hardly more challenging than driving a car, says David Leeder, head of Transport Investment Ltd, a consultancy. Yet training is more time-consuming than that for other modes of land transport, and fully-paid. A few grisly rail tragedies, such as the Hatfield crash in 2000, make it hard to argue that training should be scaled back. Rail companies are estimated to spend £20m a year on training. The expense ensures that few drivers are trained in advance in case of a labour shortfall.

So labour costs rise, and Britain’s train system grows dearer. The country’s trains are increasingly safe and popular, but equivalent systems in mainland Europe cost 40% less to run, according to a government-commissioned report by Sir Roy McNulty, a businessman, published last year. Both taxpayers and passengers are stung by this: Britain’s rail fares are Europe’s priciest.

Despite an expansion in train services, unit costs have not come down. Labour expenses are one problem among many, including unchecked infrastructure spending and an overly fragmented industry. Meanwhile problems with franchise contracts—as with the West Coast Main Line, where a miscalculation squandered at least £40m and put all other franchise awards on hold—have raised costs further. In his review, Sir Roy suggested a raft of measures to cut costs, including new approaches to staff salaries and training.

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