28 January 2016
Tories Nationalise Railways
by J.R.Thomas
Apologies to confused readers; you are right, it is not April Fool’s Day . The proverbial Martian, newly arrived on earth and standing on a garishly decorated railway platform in London, might assume it is though.
The Conservative Party is in favour of private enterprise, of allowing business to stand on its own two feet, of lowering tax rates by cutting subsidies, and of getting government out of people’s lives. Apparently, only up to a point, Lord Copper. The point arrives, it seems, when it comes to London’s public transport system, and in particular, its railway network.
Railway politics used to be easy to understand. In 1923 the large number of private railway companies were forced into four large but still privately owned geographically arranged businesses. After the Second World War the Labour government of Clement Atlee nationalised the four companies as part of its public ownership programme, though the railway business continued to be run as the four separate regions which they had been in private days. The lack of investment in the system and its failure to react to changing customer needs led to a series of changes in the 1980’s to reorganise the railways along sector lines, which did bring some improvement in service but ever increasing losses. John Major’s government in 1994 finally gripped the problem and privatised the railways, completing the task in 1997.
To travellers who had put up with ancient carriages, unreliable services, strikes and go slows, to say nothing of dirty buildings and decaying infrastructure, the handing over the public railway to private ownership was pretty much a breath of breath air. The actual rails and land and most stations continued to be owned by a state owned but independently managed infrastructure provider, which has been the most troubled part of the brave new world, going through various incarnations (now Network Rail) as it became accustomed to the challenging world of commerce. The services and trains passed into privately owned limited life franchises, sometimes with subsidies, increasingly often without. For travellers, life rapidly improved with much investment into faster comfortable trains, more seating, more frequent services, and better facilities at stations. Passenger carryings have more than doubled over the last twenty years and freight traffic even more.
Which is not to say there have not been problems. Two successive operators of the east coast mainline went bust. Some operators have suffered with the very problems of success, unable to provide enough capacity to carry the intending traffic. The decaying infrastructure has caused continuing problems and, until recently, Network Rail has struggled with its quality of project investment. It still faces a huge backlog of track improvements and over running capital investments.
Passenger memories though, are short. The chaos and appalling performance of the system of thirty years ago is now forgotten, and nowhere more so than in London. The London suburban railway system is highly congested, and routine maintenance has tended to be deferred to the great new projects that engineers love so much – the Heathrow Express, Crossrail, and the Paddington lines electrification. Changes of operators and short franchises have led to under investment at the operational level, and the gradual coalescence of large swathes of the suburban system into single operator control has undermined the principles of competition that was supposed to keep quality of service up and fares down.
But, a detached observer might think, the private system compares very favourably with the London Underground, run by the state agency Transport for London (TfL) and ultimately by the office of the Mayor of London. The Underground is also coping with years of under investment and trying to catch up; but poor and unfocused management, and militant unions who have forced through many restrictions on working practices and large salary rises, have made the system heavily loss making and very inefficient, incapable of coping with peak crowds, and with real issues of repair and reliability.
Nevertheless, the Mayor’s Office started to take control of parts of the inner London overground system a couple of years ago, originally and ostensibly mainly driven by the need to create a sort of circle line round the inner suburbs to improve rail services across London (rather than the emphasis on running services into central London). The system is running, although not heavily used overall and loss making, but it has enabled TfL to claim that it is better than the private sector at responding to passenger needs.
Now TfL has announced it will take a much larger step. As franchises expire it will take all of London’s suburban passenger services into its direct operating control. This, it says, will enable it to run much more frequent services and to coordinate the different systems to meet the needs of customers. It is not taking control of the tracks or the main stations, which will remain under the control of Network Rail, and it will continue to share many routes with the longer distance franchise operators and the freight operating companies.
You might expect a free market loving Tory Mayor to have something to say on this – and indeed Boris has. He thinks it’s a great idea; indeed that he partly inspired it and fought for it. His Tory possible successor, Zak Goldsmith is also keen – one suspects, not the view that would have been taken by his father, the late James. And needless to say, every other Mayoral candidate has warmly welcomed the proposal, so it looks like a done deal. Only the Treasury, that bunch of Gradgrinds, has thrown a little sand in the TfL smoke box – it has reinforced its policy statement that all subsidies for the London rail network will be phased out and that the system should become entirely self-funding over the life of this parliament.
There is no doubt that the nationalisation move has strong public support. Grumbling about every aspect of rail journeys to work and home again is a commuter’s favourite topic of conversation and most have forgotten the cattle truck conditions, and the uncertainty of getting to journeys end, of British Rail days. Boris is of course on his way to the Cabinet table in May, and maybe to the top job at it in four years time, and he is always a man with an eye to easy popularity rather than arguing complex propositions on free market economics. Goldsmith has a very uphill struggle to win votes from the outer suburbs if his mayoral attempt is to have any chance of success, and he will not want the commuters grumbling about him instead of their rail journeys.
But given the enormous complexity of London’s railway network, the lack of experience of TfL in running a semi commercial enterprise, and the need for financial viability, London Tories might not want to get too wedded to the cause of nationalised public transport. It seems not unlikely that, within a generation, commuters will be calling for private enterprise to sort their commuting lives out and rescue them from nationalised misery.
