This is a typical expression in English for which I have never found a satisfactory equivalent in French – maybe French-speaking readers of this blog can make some suggestions! I heard it frequently in conferences, often in the mouths of the wry and pragmatic Dutch or Danish delegates. What it means of course is that the true costs of a public service are far from covered by prices charged to users, who may think they are getting a “free lunch” but end up paying for it in other ways, usually well concealed. At a time when there is a lot of talk in France about cutting public expenditure and ending “our addiction to public spending” as the Prime Minister put it the other day, it seems appropriate to delve into three areas of everyday life in which a majority of the French either take a free lunch for granted or complain about it being too expensive when they have to pay for it out of their own pockets. And as the summer holidays are upon us, let us start with an example of France’s infrastructure, the railway system and its monopoly operator, the SNCF, wholly owned by the French state.
President Macron recently inaugurated a new high-speed rail line between Paris and Rennes on the same day as another was being inaugurated between Paris and Bordeaux. Since 1981, when the first high-speed line was put into service between Paris and Lyon, billions of Euros have been poured into other high–speed lines and the sleek trains that run on them, putting Marseille just three hours from Paris, Bordeaux and Strasburg just over two hours, Rennes, Le Mans, Tours and Lille a little over an hour. The popular Eurostar service between Paris and London is an offshoot of these efforts, leading to the first high-speed line to be built in the U.K between the Channel Tunnel and London, as well as the Thalys service between Paris, Brussels and Amsterdam. For those of us old enough to remember the long haul between Paris and Brussels on the grandly named “Trans Europe Express”, being whisked to Brussels in under 90 minutes is a luxury indeed, although for passengers travelling on to Amsterdam, the effect is spoilt by the long and a tortuous pull through Belgium and the lack of a high-speed track for the rest of the trip.
However, the ease and convenience of escaping traffic jams and the drudgery of airport security controls by travelling by high-speed train do not come cheap. The TGV operator, the SNCF has an endemic operating deficit and although it sometimes makes an annual profit (much of which is creamed off in dividends by the state) its outstanding debt of between 40 and 50 billion Euros, is of course part of the French public debt. Some of this will eventually have to be written off, in other words, charged to taxpayers, who also have to pay the cost of the debt. Only a company wholly owned by the state can enjoy such a luxury. Which goes a long way to explaining why the French state and the SNCF want to keep it a quasi-monopoly provider for as long as possible and have fiercely resisted all attempts by the European Commission to prise open the French rail market for passenger services. By 2019, we are told, regional authorities, that now have the authority to organise rail services within their regions, will be able to open up their calls for tender to alternative operators. It also explains why the SNCF has never been able to sell a high-speed train link to other countries: by normal accounting standards, it would never be profitable, or the subsidy required to make it pay deemed too high
In pursuing such a policy, the French state is of course staying true to its long-standing mercantilist tradition, which it also continues to practise with other providers like EDF and Aéroports de Paris, in both of which it is by far the majority shareholder: protect your home market as best you can while selling as much as you can to other markets. The SNCF generates 20% of its revenue from 120 countries but foreign operators have no more than a toehold in France. Sweden and Germany, among other countries where competition in passenger services has been more warmly embraced, are generally happy with the outcome. The big advantage of the French position of course is that it has given France a standard of rail infrastructure in terms of quality, safety and coverage on a par only with that of Japan. Nobody would dispute that it is a great asset to the country and cannot therefore be measured in purely accounting terms, but must also take in more intangible and unquantifiable benefits.
This being said, it is now clear, regardless of the pressure exerted by the European authorities and foreign train operators, that the limits of this essentially protectionist model have been reached. The most recent, and most expensive, high-speed lines will undoubtedly be the last for a very long time, as President Macron pointed out after inaugurating the line from Le Mans to Rennes. His message was clear. There is a limit even to the capacity of the state’s deep pockets to continue to accommodate such high levels of debt while the SNCF spends most of its budget on high-speed rail to the detriment of basic maintenance on suburban lines in and around France’s major cities, particularly Paris. The consequences are not always as dramatic as the tragic accident at Bretigny-sur-Orge in 2013 (7 dead and 70 injured) due to a lack of long overdue points maintenance. Passengers who rely on suburban services at rush hours frequently spend as long on overcrowded, delayed and slow-moving suburban train as they would to travel from Paris to Tours, Lille or Le Mans on a high-speed TGV. The SNCF’s huge pension deficit gets larger every year as an increasing number of train driver take much earlier retirement than employees in other industries. Working conditions for staff are highly favourable and have led to the SNCF’s freight business, already open to greater competition, becoming totally uncompetitive with new entrants making inroads into the market by operating more efficiently and with fewer and more productive staff.
The railways workers’ unions, powerful, divided and militant, have done their best in the past and will undoubtedly do the same in the future, to resist changes to their working conditions or pension arrangements, despite advances in technology and longer life expectancy. And they know only too well that if they want to, they can bring the country to standstill, as they did to great effect in 1995. Paradoxically though, they are not entirely devoid of a public service ethic: trains run 20 hours a day and every day of the year. Try taking a train to London, or anywhere within the UK for that matter, on Christmas Day or Boxing Day and you will be told that there are no services at all. But if you live in Paris and wish to celebrate Christmas with your maiden aunt in Lille, it is possible to get there and back by train on Christmas Day!
Such are the deeply entrenched paradoxes that the SNCF and the French government will have to confront in the next few years: maintain, or restore, a high quality service to the general public, from office workers relying on suburban trains to businessmen and women fitting in a return journey to Lyon or Marseille within a day, while maintaining high levels of safety and punctuality and making staff work longer hours and longer years so that overall costs can be covered mainly from revenue and the SNCF can cease to rely on substantial subsidies from the taxpayer. It will take more than a few lunches, free or otherwise, to get there!