EconomicsNotes

    The railways were nationalised in 1948, in a state of collapse. They were then built up as an integrated system until the 1960s, when the Beeching reforms attempted to transform them into an intercity service, and a freight service (aided by the questionable and possibly corrupt expansion of the motorways by a motorway construction executive who was also Minister of Transport, Ernest Marples, between 1959 and 1964.) This involved closing lots of small lines and network points. The service did prosper, and invested in advanced passenger trains, but was starved of funds by government during the stagflationary episode of 1973-1983. It was then privatised in 1992. A nationalised or integrated railway has positive externalities in terms of geographical mobility, though these have only recently become apparent. In the 1980s, consumers were still discovering the car, which became a more flexible and personal substitute, especially as the expansion of finance allowed more people...

  Nationalisation means the process whereby a business is taken into government ownership and is run by a public authority. Between 1945 and 1985, many British companies were nationalised ones. Governments, starting consistently in the 1980s, sold these companies to the private sector with the aim of changing companies which required public funding into ones that generated tax revenue. In addition, attempts were made to create or emulate markets in the areas where the firms operated, often by breaking the firms up into a number of new ones, so as to introduce choice for customers, competition, and dynamic efficiency. A trade-off was accepted in which formerly public companies made private profits, often accompanied by subsidy, for shareholders, but where shareholders invested in infrastructure and capital. This was accompanied by government regulation of price and services. It was the case, however, that many industries were originally natural monopolies. This is a situation in w...

What are the benefits of price discrimination to UK railway passengers?     Price discrimination is where the same service is sold at different prices to the same or different consumers. It is divided into first-, second-, or third-degree discrimination.   For price discrimination to work, companies must have knowledge of demand, the ability to stop purchasers re-selling items or services at cheap prices to others, and the company should have market power to be able to set prices. Ideally, they should also be able to stop customer comparing prices and informing each other of significant differences.     In first degree discrimination, the price is tailored to the customer and their elasticity. All consumer surplus is captured. Such a system involves charging whatever a particular consumer can pay for a seat and is built into the way in which seats become more expensive the nearer to the time of travel a consumer seeks to purchase them. For railway comp...