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How not to run a railway

One of the areas where Labour should be setting out its vision, which everyone is crying out for, and where Labour would attract huge popularity, is by reasserting the role of an activist State in areas where the market has run amok, is out of control, or has massively failed. The railways would be a good place to start (though the list is a long one) and the McNulty report, out last month, is a perfect example of everything that is wrong with Tory policy on transport.

Britain’s railways are the most expensive compared with the rest of Europe where they are still publicly owned. Why? Because, as the wealthy businessman Lord McNulty admits, privatisation has brought fragmentation when an efficient rail system requires a single linked entity. So what does the report recommend, and what are the Tories about to implement? Even more fragmentation. The maintenance of the track and signalling is now to be fragmented and put into the market, and indeed fragmented further into small companies like mini-Railtracks.

The other feature that stands out in the McNulty report, and is enthusiastically embraced by the Tory government (hardly surprisingly since they appointed him precisely to produce the report he has), is its rigid ideology. Francis (gerry can) Maude has recently acknowledged speech to the Policy Exchange think-tank that the Tory aim is to eradicate State provision of public services in this country, even if as he also admitted that means their being run by private equities from tax havens. Not surprisingly therefore McNulty pushes market fundamentalism to the limits for the railway system – driver-only operated trains, the removal of safety-trained guards from all trains, higher fares, massive cuts in station staffing, wholesale closure of ticket offices, dangerous fragmentation of Network Rail and a serious watering down of maintenance standards.

The ideology of the market as the measure of all things is even being taken to the point where safety is being left to market forces. After the accidents of Hatfield, Ladbroke Grove and Potters Bar left 40 passengers dead and the private Railtrack company was replaced by Network Rail operating on a not-for-profit basis, the ‘commercial freedom’ drive now being unleashed aims to cut out ‘interference’ from regulators and let the franchised and fragmented rail-operating companies to decide the fate of passengers.

All of this is of course justified in the sacred name of cutting costs and boosting profits – quite a nerve when the private sector has already sucked £11bn out of the railways since privatisation in 1996. There is a better way: take the franchises back in-house when they expire (at no cost whatever to the taxpayer) or when the privateers walk away, and return them under a single organisational roof like Network Rail. Why doesn’t Labour say this? It would be hugely popular.

11 Comments

  1. Patrick says:

    I distinctly remember an interview on Newsnight with John Prescott, pre 1997 that led me to believe that there would be reform of the railways – with even the odd nod to a possible re-nationalisation. I obviously got the wrong end of the stick that night, for we know what happened next. It didn’t, bar Railtrack of course. I would love to see a renationalised railway and imagine that in the spirit of “retro-nosalgia” that all trains would be repainted in BR Blue or Blue and White once again. What a joyous thought. BUT there would have to be safeguards put in place to stop Government hiving off the revenue for purposes other than the railways – as BR so often suffered.

  2. A couple of quick thoughts:

    1. McNulty was appointed to review railway costs by Labour’s Lord Adonis in February 2010 (rather than the Tories). Make of that what you will.

    2. There is some benefit to Deep Alliances (what you term mini-Railtracks). Namely bringing wheel and rail back under the control of one management team. What this actually delivers in terms of cost reduction and improved customer service has yet to be seen. The first one – South West Trains and NR’s Wessex Route – is due to go live at the end of this month.

    3. Despite Hatfield, Ladbroke Grove and Potters Bar the privatised railway actually has a better safety record than BR (remember Clapham). Although this probably reflects a general improvement in passenger and employee safety over the last 40 years.

    4. Although McNulty, an Ulsterman, compared British railway costs with a number of European networks he failed to compare them to our closest neighbour – Ireland, where the network remains both state controlled and integrated.

    Go figure – you pays your money, you get the answer you asked for!

    TFC

  3. Gordon says:

    Well, the first problem is the assumption that somehow BR was better than what we have now and that the infrastructure company Network Rail would be able to change enough to become a responsive train operator also.

    My memory of BR is of old, dirty and late trains. My commuting experience over recent years has been brilliant new trains, that are kept clean and run on time with very few ‘bad’ days and I can’t remember the last time we had a cancellation due to a shortage of train crews which BR inflicted on us almost every Friday evening.

    Fare increases are obscene but that’s down to a political decision; I don’t remember being able to travel between London and Glasgow 1st class for £99.

    1. Jon Lansman says:

      No-one would pretend that BR after years of under-investment was not on need of improvement, but what privatisation has brought, in spite of investment in new trains and as is the case with privatisation in other areas of public service e.g. through PFI, is much higher costs to service users (passengers) and much higher public subsidies for the same or a lower level of service.

  4. WatcherZero says:

    In Northern Ireland at least where bus and rail is nationalised jointly under one company the subsidy cost per rail passenger/rail km is actually considerably higher than it is in the rest of the UK.

    1. Jon Lansman says:

      WatcherZero: I don’t think the comparison between Northern Ireland and a system that carries 5000 times more passengers is of much value, I’m afraid.

  5. The Archer says:

    Why is the fact that (the labour appointed) McNulty is a ‘wealthy businessman’ even mentioned? Would you rather have some ill educated person living off the state with no idea how to run a business and no experience of using the Railway write the report?

  6. Alan Francis says:

    Labour SHOULD be doing this but they aren’t and are unlikely to do so. Despite 13 years in government they did nothing because New Labour was just as beholden to markets and big business as the Tories. The Green Party opposed rail privatisation and ever since has advocated the railways being taken back into public ownership and re-integrated. As Michael Meacher has recommended a zero-cost way to start that process is to not re-let franchises as they expire.

    Transport Speaker, Green Party of England & Wales

    1. Jon Lansman says:

      Alan: I don’t disagree with you about the last Labour government. Fortunately, Labour’s current transport spokesperson, Maria Eagle, has also said that Labour was “too timid” in government in tackling the structural problem “that is the legacy of the botched Tory privatisation”. I suspect we are rather closer to Labour committing to reintegrating railway operations under public ownership than you suggest.

  7. John says:

    I think two points need to be made:

    1. – The separation of train operators from the infrastructure owner/maintainer is a European requirement, designed to promote competition between railway operators. So re-nationalisation is not an option.

    2. – There area lot of hidden subsidies in Europe so Britain’s railways are not as uncompetitive as you may think. There was recently a conference in Europe entitled “Value for Money in Railways – what can Europe learn from Great Britain?” And they were serious. What Britain is doing with its railways – driving passenger numbers up and improving performance – is much admired in Europe.

  8. David Sterratt says:

    One other thing to add is that the subsidy now to railways is about 3 times as much in real terms as it was in the late ’80s. Average fares are up in real terms (10% last time I looked). And this is all despite there being a 60% in passenger-km travelled. I’d have thought that the costs of a railway should be relatively insensitive to passenger numbers, so I can only conclude that the current private/civil service structure of railway management is massively inefficient.

    Of course the nationalised railway wasn’t perfect – see Gerry Fiennes book, “I tried to run a railway”. He bemoaned the perpetual reorganisations undertaken by BR in the 50s and 60s that distracted from the real job of running the trains. I dread to think what he would make of the current shambles.

    That said, I think we do need evolutionary change. Bringing the franchises permanently back in house and giving strategic planning (e.g. rolling stock procurement) back to a separate of railway professionals rather than civil servants would seem to be a good step forward.

    http://bringbackbritishrail.org

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