Financing UK Rail - A Morass of Contradictions
by Keith Norman, General Secretary, ASLEF the train drivers’ union
The relationship between the government and the private rail companies is a morass ofcontradictions. Even the arch-privatiser Thatcher conceded that it was ‘a privatisation too far’ but John Major would have none of it. A firm believer that ‘public is bad, private is good’ he twisted and bent logic to produce a template of franchised rail companies that, he said, would deliver competition and the free-market into the industry.
It delivered neither, and his legacy amounts to the organisational equivalent of a dog’s dinner where no one has the slightest idea of who controls what.
Didthe Railways Act of 1993 deliver competition and end monopoly? In brief: No. If you want to go by train from Liverpool to London, you go by Virgin or not at all. If you choose to take a train from Reading to Swansea you are obliged to go by Great Western. There is no competition.
So what of the free-market? It too does not exist. The government, having made a great show of breaking up and selling off British Rail’s operations, is desperately engaged in directing them by increasingly tortuous and restrictive franchise contracts – which are, incidentally, totally ineffective. Not to mention hugely expensive to the person who should matter, the passenger.
The problem for the government is that the rail network is a service that benefits not just passengers but the entire economy and encompasses the environment aswell as commercial activities like the movement of freight. So, like it or not,the government has an obligation to ensure the network operates efficiently, so it can’t leave the industry to the mercy of a hotch-potch of profit-seeking private companies. But this is precisely what it set up in 1993.
Sir Roy McNulty’s recent review of the railway industry spelled it out. ‘The highcost of rail’ (as he sees it) ‘results partly from the industry’s fragmentationat privatisation in the mid-1990s’. As soon as a rail network is fragmented, it is inefficient.
So the government is in an impossible position. On the one hand it has a fragmented rail network, each section being operated by an independent franchise. On the other it has a public duty to ensure standards and integration, fare prices and safety levels, are strictly controlled. But then,it has no power to enforce this.
In recent years the government took a strong line with Connex South East the GNER,the holders of the East Coast franchise. It told them they were not up to the mark and insisted on improvements. Firm direction from the central body. Very laudable. So what did these companies do? They upped sticks and wandered off,leaving the government to sort it out themselves!
So the government, through the Department for Transport, is actually in a terriblemess. It makes firm promises over which it actually has no control. It makes pronouncements about levels of punctuality and conditions of stations and then crosses it fingers that the private companies will be good enough to deliver it for them. It adds up to an inauspicious mixture of bluster and impotence.
Private rail companies do not have loyalty to passengers, freight carriers, the network, the government of the day or anyone else except their share-holders.That’s how capitalism works. The demands of their shareholders are much moreimportant to them than the policy documents produced within the Department forTransport. The government operates a sham where it pretends to control an industry of which it has abandoned control, and in the process lets down everyone who uses the network.
In the celebrated phrase, ‘What a way to run a railroad!’
ends
