Our railways are more nationalised than privatised

Thomas Walker March 14, 2016 2
Our railways are more nationalised than privatised

Very little time passes without somebody calling for the renationalisation of Britain’s railways. It became a serious talking point in last year’s Labour leadership election, with both Jeremy Corbyn and Andy Burnham making pledges to bring the national rail network back into public hands. Corbyn has continued to reiterate this message at every opportunity since becoming leader, describing the network as ‘fragmented’ and lamenting how it, in his view and that of so much of the electorate, puts private interests ahead of those of the travelling public.

The issue has resurfaced in the past few weeks with a new proposal to allow private companies to take over operation of some of Network Rail’s major stations. This prompted Bring Back British Rail campaign to organise protest demonstrations across the country. Quite how this particular proposal affects the travelling public is unclear. The essentially nationalised Network Rail is in a state of financial turmoil, with major infrastructure schemes like the Great Western and Midland Main Line electrification projects years behind schedule and horrendously over budget. Meanwhile an organisation whose sole purpose is to maintain rail infrastructure is busy effectively operating shopping centres.

Britain’s railway stations are already mostly operated by private train companies. What difference this change will make to the travelling public is entirely unclear. Any opportunity to generate income for Network Rail to support the work it needs to do and save public money seems to benefit passengers.

Continued calls to ‘bring back British Rail’ are problematic as the franchised system we currently have puts the network under a greater degree of state control than it has ever been. The services operators provide, the rolling stock they order, where they run, and even what fares they charge are mandated in franchise specifications. The bidding process allows potential operators to propose some initiatives of their own, but the overall direction of the franchise is set out in detail well before the invitation to tender is even put out.

As such, the opportunity for private investment and innovation to benefit passengers in the way that was originally envisaged is stifled by the Department for Transport’s centralised planning. Some private initiatives still do make it through, such as Chiltern Railways’ impressive Evergreen projects or Virgin Trains’ new services to Blackpool and Shrewsbury, but these are more the exception than the rule, and Virgin had an uphill battle to even get permission to introduce these new services.

Open Access Operators face similar difficulty. These are companies which operate entirely original services, not part of any franchise. Grand Central and First Hull Trains have brought no end of benefits to previously disconnected cities like Hull, Bradford, Sunderland and Wakefield, as well as introducing vital competition on the East Coast Main Line. Yet attempts by both Grand Central owner Alliance Rail and First Group to introduce new open access services on the ECML are delayed again and again as the DfT rejects applications on the grounds of ‘revenue abstraction’.

On the parallel West Coast Main Line, where for a long time Virgin Trains have had a complete monopoly on long-distance services, Alliance Rail have only recently gained permission to introduce their new London-Blackpool services. These six trains a day are but a shadow of the original proposal, rejected of course, which would have seen a network connecting Euston to a range of destinations in the North West.

Competition of course was meant to be the great advantage of rail privatisation. Originally services along major main lines were split between local and express operators, but later changes have seen these recombined, eliminating any competition on major main lines such as the Great Western, Great Eastern and Brighton routes. I am lucky to live in Milton Keynes, where two operators continue to compete on services both to London and to the north.

While the off-peak ‘any permitted route’ fare to London Euston left over from the days of British Rail stands at £23, both London Midland and Virgin Trains offer their own fares at £16.00 and £15.50 respectively. Both operators provide frequent fast services, while any major disruption leads to both accepting each other’s tickets. I look forward to Alliance Rail joining the competition in the next year or two, subject of course to Network Rail granting them permission to stop at Milton Keynes, which is still pending.

The lack of competition in the current structure has started to be recognised recently, with the Competition and Markets Authority now supporting the complete abandonment of the franchised structure and its replacement with a model based on open competition. Various ideas for how this could be implemented abound, including open access operation across all routes or the operation of specific services by operators in a more concession-like model, similar to how London bus routes are contracted. Train companies could be awarded slots much like airlines are at major airports, allowing a range of companies to compete on a single corridor.

In light of how the centrally-specified, competition-eliminating franchise structure has led to higher fares and little improvement in choice for passengers, how an expensive return to a state-run railway could deliver any improvements is entirely unclear. Complicated fares may abound in the UK, but the situation on France’s state-run railways is just as perplexing, with every service seeming to have its own unique single fare across the TGV, TER and Intercites brands. France has poured money into its rail network over recent decades, yet rail ridership remains low while Britain’s climbs to levels not seen since before the Second World War.

The idea that renationalisation would lead to lower fares and a service run ‘for the people’ lacks any sense of reality. British Rail left a legacy of closed branch lines, reduced capacity, outdated rolling stock and downgraded services, while its attempts to innovate lead to decidedly mixed results, the Advanced Passenger Train remaining quite possibly the most embarrassing white elephant in railway history.

It’s clear that the true advantages of an actual privatised system have not been delivered under the franchised system. There is little competition and little room for innovation or private investment. The railways are publicly owned, with services and regulated fares mandated by public bodies. This is not privatisation, and it has delivered next to none of the benefits of privatisation along with all of the drawbacks of nationalisation.

Instead of calling to bring back British Rail, the organisation which blew untold millions on abortive research projects and introduced such wonders as the Pacers, campaigners and politicians who want to see change for passengers should instead focus on reducing the Government’s involvement in how the railways are run. Only then will we see the kind of railway that free private operation can really deliver.

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