Adam Smith's proposal for Network Rail

07 September 2016

Tomorrow (Thursday) the Adam Smith Institute, a neo-liberal right-wing think tank, will call for 'Network Fail' to be part-privatised. Mick Whelan, ASLEF's general secretary, was incredulous when he heard about their proposals.

‘We’re stunned that the Adam Smith Institute, given the level of back door subsidy for track access to the current train operating companies, could even imagine the part privatisation of Network Rail,' said Mick. 'The Conservative government’s current system of subsidising the TOCs by sleight-of-hand would have to cease and the true level of public subsidy would be revealed.

‘We know that Network Rail isn’t perfect. Its governance needs to be improved and it needs to understand its asset base better but every rail professional knows it’s the only show in town for the future of Britain’s railway.

‘There are enormous benefits to Britain in having Network Rail as a national, publicly-owned, properly integrated infrastructure organisation. Such a model is the best way to ensure a strategic, coherent and long-term approach to our railways. A publicly-owned Network Rail can borrow more cheaply to invest – saving the Treasury and the taxpayer millions every year – and generate tremendous economies of scale through national level procurement.’

The Adam Smith Institute, which is wedded to the belief that the market always knows best, says: ‘Amid ongoing rail chaos we urge the government to sell off up to 49.9% of Network Rail, abandon HS2, and focus on electrification to open up the Northern Powerhouse.’

The report, called ‘Network Fail: Getting UK Rail Back on Track’, says NR lacks ‘the discipline of the private sector', and should seek to replicate the ‘success of the privatisation of the National Grid’.

‘Network Rail is an unwieldy beast with a vast debt burden of £37.8bn that is now included in public liabilities. It is a strain on the taxpayer and up to 49.9% needs to be sold off. The government’s 40% Eurostar disposal has shown there would be no lack of buyers.

‘The hugely costly and inefficient HS2 programme should be scrapped. Currently on course to cost the taxpayer in excess of £50bn, theHS2 project is unnecessary, with current off-peak occupancy levels well below 50%, as well as being economically irresponsible - the numbers simply do not stack up.’

Nigel Hawkins, who wrote the paper, said: ‘Action to sort out Britain’s railways is a priority. Radical decisions are needed to deliver financial competence, sensible investment and improved customer benefits into the system. Scrapping the shockingly expensive HS2, selling 49.9% of Network Rail, and cracking down on under-performing franchises are priorities.’

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