ail franchising was suspended “for a limited period, initially six months”, said the Department for Transport in March, leaving the door open for what now seems likely – an extension of the emergency setup. If the government can’t even guarantee that schools will be open in September, good luck in predicting demand for rail travel in the autumn. The old regime is not coming back soon. In fact, permanent abolition of old-style franchising was always the way to bet. It would be a good thing if Grant Shapps, the transport secretary, formally conceded the point. Then he could get on with the vital job of plotting a new structure for the railways, a task that should have addressed long before Covid-19 arrived. It is, remember, 16 months since the department’s own adviser, Keith Williams, the former British Airways boss, described franchising as a “broken model”. The current emergency measures agreements, or EMAs, which transfer cost and revenue risks to the government, are hideously expensive, as we are discovering. A figure of £3.5bn for six months is enormous, but cannot be called unexpected. If you’re running about 70% of trains but getting only 10% of the usual passengers, there will be a big bill. It’s fair to call the figure a bailout of train operators, but not terribly useful. Yes, the companies, in the absence of EMAs, would have been on hook for heavy losses – but not £3.5bn-worth. In practice, they would have handed back their franchises in droves, as they are allowed to do via much smaller penalties. A few operators with loss-making franchises, such as FirstGroup, got lucky via the EMAs: day-to-day losses were replaced by a risk-free management fee for maintaining a service. The point, though, is that, one way or another, the bulk of the cost of running the railways during lockdown would have landed on the public purse. The result is that Shapps has control and freedom to implement a new permanent system as soon as he wishes. The train companies probably won’t resist because they are likely to have less appetite to shoulder revenue risks. Who, for example, would want to punt on how an enforced experiment with homeworking will affect long-term demand on commuter services? A rough outline of a new system could look like the current emergency setup: a contracting model where operators get a flat fee. The government could also set up its own state-operators. But the details are the important part. For example, does Greater Manchester get greater local control? And how would Williams’ sketchy idea about a coordinating “fat controller” figure work? Frustratingly, his report, though long completed, still has not been published. Since work on those issues must have started pre-Covid, it’s fair to expect Shapps to have a few answers. Please, let’s not suffer multiple rounds of argy-bargy over EMA extensions for the next two years. Long-term reform was needed before Covid-19 – get on with it. FCA finally kills off marketing of speculative mini-bonds “We know that investing in these types of products can lead to unexpected and significant loses for investors,” said the Financial Conduct Authority, as it made permanent its temporary ban on the marketing of “speculative illiquid securities, including speculative mini-bonds” to retail punters. Yes, it’s not only the financial regulator that knows the dangers. So do the 11,000 people who lost money at London Capital & Finance, the promoter that collapsed owing £236m. So do customers of the many LC&F imitators that have subsequently failed after flogging mini-bonds with enticing but unbelievably high interest rates. The FCA clampdown, plus the widening of the definition of what counts as speculative, is welcome. But, come on, a wide-awake regulator could surely have acted five years ago, before the damage was done. Dame Elizabeth Gloster’s independent report on the FCA’s handling of LC&F is due in September. One trusts it will be suitably damning. Barratt’s furlough plan still under construction Taylor Wimpey is handing back to government its grant for furloughed employees “given the resilience in trading”. Fellow housebulder Bellway never took the cash, adopting the commendable stance that Help to Buy support is generous enough. How about Barratt Developments, the industry leader? “We are keeping our use of funding available through the furlough scheme under review.” Don’t ponder too long – your competitors have the right idea.