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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.

Loco motives

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.


olching said...

Good article, Neil. Keep up the fight on this.

The £ 1,000 ticket is obscene. I heard about it on the radio the other day.

I even think there's more behind the absurd ticket pricing system. It's not just done under the mantra of 'choice', but I think it's also a way of control:

If you decide to travel spontaneously and you don't earn enough money, you simply can't. The whole idea of freedom of movement (as always) applies only if sufficient funds are available.

It really is a way of keeping the populace in check, making sure they plan their lives months ahead (to get cheap prices) and don't rock the protestant work ethic too much. One (of many) consequences of this is that is it knocks out any spontaneity.

By the way, if you go to you can book tickets within Europe (albeit to and from Germany) for prices as cheap as 29 Euros. I've done this a few times. I've even travelled from Germany to London for 59 Euros - Plymouth to Birmingham one way on the day - by contrast - costs 84 quid.

Gregor said...
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Gregor said...
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jock mctrousers said...

Yes, keep up the good work - great piece.
I heard something on R4 the other day - someone gleefully predicting peak-hour power-cuts in UK by 2013. Then there was someone saying something about the likelihood of the power-companies blackmailing the country with power-strikes to get us to pay for the infra-structure work THEY are supposed to pay for, so they got all the profits and then get massive bailouts like the railways... oh, and the New Labour lot all get jobs with the privateers. Surprise, surprises... I was only half-listening, as is often the case with radio, but at least the Beeb fulfilled its 'balanced reporting' requirement to an extent. However, I think we can expect the media to be seeded with more soundbites about the 'inevitability' of power-cuts until they seem inevitable and then happen - that's the way they do it.
Gregor - the Guardian and Independent are 'lukewarm' about public transport means that it's 'politically difficult'? Well might as well surrender then? Hardly any surprise that Tory grandee Max Hastings likes Boris Johnson's idiotic policies on London Transport. Nor surprising that he's cropping up in the Guardian these days, along with neocon nutjob Irwin Stelzer. I'll say this for Max though: I used to read (well buy for the Modesty Blaise cartoons and Brian Sewell) the Evening Standard regularly throughout the Thatcher years, when Max edited it, and I found that it consistently gave more space to genuine 'left' opinion than the Guardian did, despite the latter's 'left' image. There was a while, around the run-up to the Iraq war when Seamus Milne had a higher profile in the Guardian, and it felt a bit more 'left' for a while, but that was unusual. I no longer read either regularly now, but they're both considerably worse - I note that they're now giving the Standard away for free. If the Guardian keeps up its current trajectory, they won't be able to pay people to take it.

DBC Reed said...

Strange that the left and the unions don't get behind schemes to finance transport infrastructure such as taxing the rise in land values that always accompanies such developments.
Fares Fare A Blueprint for a Green London on the Net shows that Ken Livingstone and Dave Wetzel of TFL did indeed lay out a blueprint for future public transport by using local tax revenue.

DBC Reed said...

Should be Fares Fair ,of course.(See above)

Neil Clark said...

olching/Gregor/Jock- many thanks.
olching: good point about how the fare system destroys spontaneity- when i was a student in the 80s, we regularly used to travel around the country by train on a whim at weekends visiting a new town- or going to a new football ground to see a match. i did the same when i lived in Hungary in the 1990s. the knowledge that you could just make a decision on a friday night or saturday morning and travel where you felt like going at the weekend gave you a real sense of freedom, which today is lost for most people in Britain. (yet just across the north sea in Belgium, where the railways are still publicly owned, fares drop by 50% at weekends, making it easy for people to get out and about and visit friends and family.)
It’s another example of how neoliberalism has destroyed freedom in Britain and has made our lives less exciting.

gregor: it's sad how many on the liberal left in Britain seem more concerned with issues such as whether we should legalise hard drugs than in public ownership. Re your second post- yes, racism against Russians and other eastern Europeans is one of the last acceptable forms of racism in the west. Here are articles I’ve written on Serbophobia and Russophobia.

Jock: good point. Newspapers are full of stories about rip-off privatised energy companies, yet their editorials generally call for more ‘competition‘, not renationalisation.

DBC- totally agree with you re taxing the rise in land values.

Neil Clark said...
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Neil Clark said...

Hi Gregor, here are the links again:

Gregor said...
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David Sterratt said...

I fully agree with the original article. Rail nationalisation could be very easy and cheap, as East Coast has shown.

The Bring back British Rail campaign has organised a Number 10 petition, which I would encourage people to sign. Even if you don't agree with the precise form of renationalisation proposed, the BBBR website is worth a look for its take on the clean design which characterised BR - as opposed to some of the awful train liveries we have now.