For sale to a private buyer: the biggest train set of them all
1,500 white-collar rail jobs to go
Railtrack offer)
1 Explain each of these terms:
a) privatisation
b) franchise
c) public section pay
d) management buy out
e) pre-tax profits
f) operating profits
g) white collar workers
h) small investors.
2 a) What are the government's main reasons for privatising businesses?
b) Which of these reasons apply to British Rail?
3 One reason for privatisation was to provide better services.
a) What aspects of the railway service should improve as a result of privatisation?
b) Do you think any aspects will deteriorate? Justify your answer.
4 Another reason for privatisation was to keep costs down. Which article suggests that costs to the consumer might rise after privatisation?
5 Study the financial pages of a daily paper. Which UK companies have been privatised in recent years?
6 a) Choose any two of the companies you listed for question 5. Have they proved to be good investments for those who bought shares? Explain how you decided.
b) For your two chosen companies, how could you find out whether the social benefits outweighed the social costs of privatisation?
Activity
(1,500 white-collar rail jobs to go
Full rail safety 'some way off')
1 a) Why are the jobs at BRIS being lost?
b) Who might benefit from these job losses and who might lose?
2 Taking these three articles together, it seems that the staff cuts in the track and signal maintenance division are being made despite warnings about safety on the railways. How do you think the management of Railtrack would defend their decision to cut the jobs?
3 a) What social responsibilities does a nationalised railway service have?
b) Put your answers to a) in order of priority.
c) What social responsibilities does a privatised rail service have?
d) What do you think might be the social costs of rail privatisation?
e) Do you think the economic benefits outweigh these social costs? Explain your view.
Activity
(Full rail safety 'some way off')
1 a) Put Mr Horton's statement into your own words.
b) Is he saying that the railways are safe or not? Explain your answer.
c) Why is safety important to a privatised rail system? Think carefully about your answer.
Activity
(BR sell-off to go ahead despite strike damage
Railtrack scrutinised ahead of privatisation
Railtrack offer)
1 a) 'Some claim that, with 11,000 staff, Railtrack has considerable scope for increasing productivity through rationalisation.' What does this mean?
b) Why would investors be keen to see rationalisation?
2 a) What would make institutional investors decide to invest in the rail industry?
b) Why might small investors want to invest in Railtrack?
c) Why might strikes have frightened off some potential investors?
Activity
(Managers buy out rail food service)
1 Why did the managers want to buy their own business?
2 a) How do they plan to expand the business?
b) Why should a new business want to expand?
c) How can i) training, and ii) quality control, help the business to expand?
3 a) One reason for privatisation was to create competition to drive down prices. What competition will OBS face in providing rail catering?
b) Why should it want to improve its service?
Activity
(Rail users face 'unrestricted' fare increases)
1 How will the 25 new train operating companies decide how to price their product?
2 How important will ticket price be in the companies' marketing strategy?
3 How could the marketing managers discover what will make more people travel by train?
