Monday, November 16, 2009
Backtrack or Derail
This article of mine appears in the New Statesman.
It's also cross-posted at the Campaign For Public Ownership website.
A pledge to renationalise the railways would be a clear vote-winner. So why do passengers’ demands fall on deaf ears?
Public ownership is a puzzle. Voters are in favour of it, but our three main parties offer little to its supporters in terms of viable policy options. Instead, they remain wedded to a pro-privatisation agenda, trying to outdo each other in making lists of what public assets to sell off next.
In the past two years, the government has nationalised Northern Rock, and has taken large stakes in leading banks. Privatisation has never been so unpopular. But the gap between public opinion and the position taken by our politicians is at its greatest in the case of the railways.
Rushed through by John Major's government, privatisation has left us with fragmented and user-unfriendly railways, requiring around four times the public subsidy received by British Rail. Despite the vast amounts of taxpayers' money that have been handed over to private train operators (for example, Virgin Trains received £294.6m this year for running the West Coast Main Line franchise), our railways are easily the most expensive in Europe, with fares 3.4 times the global average.
Research by the investment bank UBS showed that while a 125-mile, second-class train journey in Britain costs £54.39, it costs just £18.94 in Italy, a country with a similar average income. Since privatisation in 1996, fares for long-distance trips have soared by up to three times inflation. This year alone, fares rose by an average of 6 per cent, with services such as CrossCountry hiking prices by 11 per cent.
Add to the equation that rush-hour trains are often overcrowded, owing to the inadequate number of carriages (another result of privatisation that set up rolling stock companies), and it is not surprising that 70 per cent of the public back the renationalisation of the railways. But their calls are falling on deaf ears. The Tories want "longer, better franchises" for the train operators. They also want Network Rail, the not-for-profit, quasi-public body set up by Labour in the aftermath of the collapse of Railtrack, to lose its monopoly on engineering work.
The Liberal Democrats pledged renationalisation in their 2005 election manifesto but the policy has now been dropped, to the consternation of party activists and some MPs. "Where is it written that we have to abandon good ideas simply because Labour and the Tories have abandoned them, too?" Lembit Öpik asked at this year's party conference, where several pleas for taking the railways back into public ownership were rejected by the party.
Labour's stance is perhaps the most baffling of all. Here is a party that is down in the polls, and in desperate need of vote-winning policies. Labour opposed the sell-off of British Rail when in opposition, with Tony Blair promising a "publicly owned, publicly accountable railway". Yet in government it has happily accepted the privatised system.
What would Labour lose by reverting to its earlier stance and committing to full-scale renationalisation? The answer is nothing. The government's inaction can be traced to the man at the top. "The trouble is that Gordon actually believes all this neoliberal dogma about the benefits of privatisation," a former Labour MP told me earlier this year.
Brown's speech at this year's Labour party conference, in which he attacked "right-wing fundamentalism that says you just leave everything to the market", seemed to signal a move away from New Labourism to a more social-democratic agenda. But the Prime Minister showed his true, pro-privatisation colours when, shortly afterwards, he announced a fire-sale of publicly owned assets - including the Tote bookmakers, the Channel Tunnel rail link and the Royal Mint.
We should not forget the crucial role that Brown played in aiding and abetting the Tory sell-off in the 1990s. In Broken Rails: How Privatisation Wrecked Britain's Railways, Christian Wolmar describes how, in the spring of 1996, the shadow chancellor vetoed his party's plan to scupper the forthcoming privatisation of Railtrack by announcing that, on coming to power, they would replace its shares with preference shares. Labour's initiative was "a genuine opportunity to undermine the [privatisation] process fatally". But thanks to Brown's intervention, the knock-out blow was never delivered.
Opponents of renationalisation say that bringing back British Rail would cost the government too much money. But they ignore the fact that we are in a recession and many franchises are in serious trouble. This year, we have already seen the government renationalise the east coast rail service after NXEC, a subsidiary of the troubled transport company National Express, tried to get its contract renegotiated. Eight of the 19 franchises expire in or before 2013, which means that at most only 11would have to be bought out by the government - that's assuming no others default, as in the case of NXEC. Renationalising in this way, and setting 2013 as the date for the establishment of a fully publicly owned network, would not only reduce the costs of the process, but expose the hypocrisy of the free-market critics of public ownership, who would be left arguing for continued taxpayer subsidies for a privately owned railway.
A golden age
Renationalisation could, and should, usher in a new golden age for Britain's railways. For that to happen, we need to acknowledge that railways are a public service and not judge them on how much revenue they generate. That means returning to the spirit of Barbara Castle's 1968 Transport Act, which relieved the railways of what Wolmar describes as "the impossible target" of breaking even or making a profit.
It means reintroducing distance-based pricing and scrapping today's market-based pricing, which has led to extortionate fares - such as Virgin's £247 "anytime" return from London to Manchester, or the first fare costing over £1,000 (from Cornwall to Scotland). It means reducing ticket prices to the European average, with 50 per cent reductions of fares at weekends, enabling Britons to travel across the country cheaply. And it also, of course, means more trains.
Nationalisation would have a positive social and environmental impact, and it would also have a wider political significance. It would be a clear sign that the era of neoliberal extremism ushered in by the Thatcher government in 1979 is finally at an end. The sell-off of the railways was the most extreme of all the Conservative privatisations. No other country in western Europe was foolish enough to follow Britain's example - even in "free market" Switzerland, the railways are publicly owned.
If we are serious about constructing a society where the needs of people come before capital, renationalisation of the railways would be a perfect place to start.
UPDATE: Didn't think that things could get any worse for travellers on Britain's privatised railways? Think again.