The current and ongoing issues with Southern Rail should be another nail in the coffin of the failed experiment that has been the privatisation of our railways.
It is the latest in a series of examples that illustrate just what a bad deal for taxpayers the privatisation of the railways has turned out to be.
From the fiasco of Railtrack, to the issues around Metronet (in charge at one point of two-thirds of the misguided public private partnership (PPP) on the Tube), to the temporary nationalisation of the East Coast line, to the chaos around Southern today, railway privatisation has totally failed.
But incredibly the Government is now proposing that the publicly-owned Network Rail share its responsibility for running the tracks with the same private train operating companies that our failing customers.
Network Rail has had full responsibility for running and developing the network since it was formed in 2002 after a series of fatal accidents, such as at Hatfield and Potters Bar, hit its predecessor, Railtrack.
Unite the Union’s Hugh Roberts rightly responded angrily to the Government proposal, saying that “politicians, such as Chris Grayling, have short memories and have conveniently forgotten the Hatfield rail crash in October 2000 when four people were killed and more than 70 injured which happened under the aegis of privately- owned Railtrack,” adding that “since Network Rail took over the infrastructure and maintenance of the rail system, safety has greatly improved.”
Furthermore, as Andy McDonald, Labour’s shadow transport secretary put it, “train operating companies, some of which run abysmal services, should not be invited to take responsibility for the repair and maintenance of Britain’s railways.”
Our railway network is now the most expensive in Europe, meaning that both taxpayers and passengers get a bad deal.
Transport is something which should be run as a public service for everyone’s benefit. Instead, we’re spending millions subsidising the profits of private companies, while all too often passengers are left frustrated as their local services are removed or not properly funded, and fares increase whilst staffing levels are cut.
For these reasons, most of the public understands that this is the right time to plan returning the entire national rail network to public ownership.
Evidence backs this up. Indeed, just a few years ago East Coast — having failed drastically in private train operators’ hands — was run more successfully, more efficiently and with higher passenger satisfaction levels as a public service. It also returned record amounts of money back to the government compared to the previous private operator.
If the government tossed aside their ideological blinkers, they would do themselves a great deal of good among passengers and taxpayers alike. But as with so many issues, the Tory development of rail and transport policy is guided by neoliberal ideology, not what works best for Britain.
Again and again, the privateers on our railways have taken the public sector for a ride. Time and again, we have seen the nationalisation of losses and the privatisation of profits.
The railways is perhaps the clearest demonstration that it is a fairy tale that privatisation means the private sector takes the risk as well as taking its profit. In truth, every time a privatisation of a vital public service fails, the public sector picks up the tab. This culture of parts of the private sector fleecing the taxpayer has to stop.
But the real issue is that it is inherently wasteful to run these services on a privatised basis. The nature of the privatising companies is that a significant proportion of the profits of their activities has to be paid in dividends to shareholders rather than reinvested in the railway service. This is money wasted. A publicly owned company would be obliged to reinvest any revenues back into the transport system.
And as Andy McDonald put it with regards to the Government’s aforementioned proposal, “Private companies are only likely to have concern for our infrastructure for their period of commercial interest, but our railways require long-term investment and strategic thinking.”
Furthermore, privatisation is justified on the grounds that the private sector is driven, through the rigour of competition, to be more efficient and more responsive to passengers’ needs.
This is a fiction in the case of a natural monopoly like a railway. Apart from the brief period of competition among bidders for contracts, there is hardly any day-to-day competition at all — no one is going to build a rival railway line and poach passengers from the private franchisee. They are under no pressure from any competition at all. In such circumstances, it is more rational, and makes more sense in terms of sustaining investment, for rail services to be publicly owned.
Nor is it the case that public ownership of the rail network naturally has to involve poorer management than the private sector. There are many publicly-owned rail companies all over the world that provide services that British transport users can only envy. The task is to build up good quality management, including the best management from around the world, overseeing real investment that meets the needs of rail travellers.
The rail network would be more rationally run in the public sector, with affordable fares for all and long term investment.
As part of a clear strategy for transport, Jeremy Corbyn as part of his Labour leadership campaign in the summer made it clear that under a Labour government the railways will be taken back into public ownership as franchises expire, delivering better run transport and an end to our rip-off railways, with estimates that regulated fares could decrease by up to 10 per cent.
Now is the time to put forward such bold policy proposals and expose the Government’s attachment to extending privatisation is due to ideological dogma not what is best for the people and economy of Britain.
First published on WriteYou.