Because Grand Central operates in competition with National Express East Coast, it is innovative, for example embedding board games like Monopoly and chess into table-tops. It is happy for passengers pay for their tickets onboard trains, including if they want discounted fares, rather than treating them as criminals which seems to be the practice of the franchised InterCity operators (who themselves have made significant improvements since privatisation). Furthermore, if a passenger is forced to stand, he or she is given a 50% refund.

But there is still much more competition that needs to be introduced. Later this month, Wrexham & Shropshire will launch a new service competiting against Virgin Trains and Arriva Trains Wales. But such ventures are hindered by the lack of enthusiasm by government. British Rail removed a lot of capacity from the rail, and Network Rail has cut the available ”paths” to suit its own convenience, completely failing to understand that with rising passenger numbers, we need more capacity, not less.

One thing Network Rail ought to be doing is to construct more overtaking loops which would make it easier for greater numbers of long-distance trains to share track with commuter ones. There is also a golden opportunity for more competition thanks to the spare capacity at Waterloo now that Eurostar has moved to St Pancras.

Thankfully, Renaissance Trains, which was behind the creation of the Hull Trains open access service (now run by First Group) and is behind Wrexham & Shropshire, is looking at further new competiting services, including one between Glasgow and Liverpool/Nottingham and one between the Humber Coast, Lincoln, Cambridge and London.

Competition, I pointed out, has already brought improvements and will increasingly do so. The model of vertical separation between track and trains is vital to enable it to thrive.

The best bit of the evening was walking into an unrelated after-party and hearing one of my arguments being propagated. Mission successful. It was a good party, too.

Only two examples of successful vertically-integrated rail systems seem to be proposed. The first is Amtrak, the American passenger service. Yet Amtrak is deeply unpopular with the American public, running a service with hardly any customers. Its whole business handles only about 60,000 passengers a day, is heavily subsidied (like rail elsewhere), and regularly sends lobbyists to Washington with the begging bowl for more money. In 2002, the company threatened to stop running all long distance rail services unless it was bailed out by the US Federal Government. By comparison, 30,000 passengers pass through the UK’s Edinburgh Waverley station alone every day, and that surely has a fraction of the passengers a London station like Waterloo enjoys. America, it seems to me, does not exactly provide us with an example of a perfect rail system.

The second example is Japan. Japan has a good railway system, but it’s more complicated than vertical integration advocates suggest. For decades, exceedingly large quantities of government money have been thrown at the railways. Some people seem to be under the misconception that vertical integration means that the market alone decides prices. That’s not what happens in Japan. “Fares and regulations are standard for all companies,” says japanrail.com. Government is involved, just as in a vertically-separated system. The difference, of course, is that in a vertically-separated system, as competition from open access operators increases, you can cut the role of regulators in deciding consumer prices.

“The trains run on time,” says the Rail Freight Group about Japan’s railways, and “they are clean if somewhat crowded (despite high fares).” Just as in Europe, there are accidents. In 2005, over 100 people were killed and 458 people were injured when a Japanese train derailed and hit an apartment block.

Japan’s railway is good but this has been a very high cost, both in terms of government spending and fares for passengers. An article by an American working at the Japanese Ministry of Transport two years ago reveals that: “the Japanese government has launched an ambitious effort to expand high-speed rail service over the next 10 years. The cost, close to $30 billion, will be funded by the national government, local governments and revenues generated from existing high-speed lines.” The article claims that: “Japan has consistently poured billions of dollars into its rail infrastructure (even after privatization)… The lesson from Japan is obvious: Intercity rail systems, whether private or public, need stable sources of public investment to be successful.”

I post that last quote not necessarily in agreement but because I think it’s worrying that people have latched onto Japan as some form of free-market nirvana, where railways run without regulation or other government involvement thanks to vertical integration. That isn’t what exists. In fact, in the long run and all other things being equal, regional monopolies will inevitably require greater regulation of timetables and fares than a vertically-separated railway that allows competition.

Finally, the Japanese are less wedded to vertical integration than might be assumed. That $30bn high-speed rail service will see the ownership of the track separate from the running of train services.