Rail 700: Renationalisation never seems to go away

It’s amazing how much attention plans to renationalise the railways always attract. The latest suggestion came in a report produced by Transport for Quality of Life, Rebuilding Rail, and received considerable coverage in both press and broadcast media, including a big piece in The Observer and an appearance by both Phil Haigh and myself on BBC Breakfast.

The reason is that nationalisation remains popular. The privatised railway companies have never managed to win over the majority of the public to their cause, and they remain the butt of considerable criticism, some fair and some unfair. The public dislike the complex structure, the ridiculous branding, the feeling they are being ripped off and the fact that the private firms at times behave with as little regard for ‘customers’ as the worst of British Rail staff.

Therefore the words ‘renationalisation’ touch a nerve and elicit interest among news editors. This time, though, there were other reasons why the report attracted wider attention. First, the privatisation of the railways is seen by many people in the wider context of the neo-liberal approach to economics that has prevailed since Margaret Thatcher was elected in 1979 and which is now being discredited through the bank crisis and the austerity programme. As an author of history books, I can see how the fashion in economics has swayed over decades between laissez faire liberalism and more interventionist approaches. We have been at the far end of that spectrum for some time with our political leaders emphasising that ‘private is good, public is bad’, deregulation is the solution to all ills and anything that cannot be monetised is worthless.

Therefore the notion of renationalisation reflects the zeitgeist. This time, too, the report published to stimulate the debate was particularly well-argued and well-written.  It was not one of those dashed-off two week consultancy jobbies that are a smokescreen for the political convictions of those who have commissioned them (a game, incidentally, played by all sides in the debate over railway politics). Quite the opposite.  It was written by a couple of independent transport experts, Lynn Sloman and Ian Taylor (Declaration of interest: I’m quoted twice, but they talked to dozens of other people).

Of course its conclusions  may be seen as predictable since it was sponsored by the unions but It is a serious piece of work, the kind of analysis which might have been produced if someone more able to stand up to political pressures than Sir Roy McNulty had produced last year’s analysis into the structure of the industry. Even those wedded to the status quo or some minor variant of it would do well to read it.  The analysis is far more incisive than the mishmash of contradictions put out by McNulty after his efforts had been put through the political wringer. They argue that the privatised rail franchises should be phased out, the railways reintegrated and passengers given a greater say in the running of services. They analyse the experience of other European countries and point out, as I have done many times, that there would be no great cost to reintegrating the railways back in public ownership. There is even a table that looks at EU legislation and what would be feasible under it in order to dismiss that canard about European legislation not allowing integrated operations.

The third reason why the report attracted attention was the response by Labour.  In the old days of New Labour this sort of report would simply have been ruled out of hand with a remark such as – ‘ of course the present system is not ideal but the last thing we want is more upheaval’ (I cannot resist saying, as an aside to an aside, that this consideration never seems to apply to the health service which has been subject of reorganisation laid upon reorganisation ever since I was drinking NHS issue orange juice in square bottles with blue caps).

Not so now. Maria Eagle was quoted in The Observer as welcoming the report with the words ‘Under the current system we have unaccountable train companies given a licence to print money to operate a monopoly service at high cost to passengers in an industry that still relies on £4bn from taxpayers every year’.

It was, though the next thing she said that actually will resonate further – even with the Daily Mail: ‘Increasingly franchise are run by subsidiaries of the German, French and Dutch state railways’… If one or more of the big franchises coming up is won by these companies, I suspect the interest in the press, even rightwing papers, will intensify because of the contradiction that their nationalised businesses are allowed to run the railways but not ours.

So will any of this happen? It is noticeable that in the responses to The Observer article which trailed the report, many people have no faith in Labour’s commitment to change anything radically in the railways given that the party had ample opportunity to do so during its 13 years in office and failed patently to do so.  Ms Eagle, too, did not actually fully endorse the report’s findings.

However, times are changing. On the same day that details of the report emerged, Labour found itself in a 14 per cent lead and there was renewed criticism of the crazy Public Finance Initiative which has crippled parts of the NHS. While the neo-liberal model of economics espoused by both main political parties is still flavour of the month, every banking scandal and every poor set of employment or output figures represents weakens support for it. The battleship of Reagonomics might not be sinking but it is beginning to leak under increased public scepticism about its viability and  therefore it is no longer certain that a Labour government would be quite so acquiescent of retaining structures that are clearly inappropriate. Remember, it was the Tories that accepted the Private Public Partnership for the London Underground had to go.

Indeed, already Network Rail is effectively renationalised. Moreover, the notion of alliances between train operators and Network Rail put forward in the McNulty report is being realised. Tim Shoveller, the long time Stagecoach operator, is now in charge of both operations and infrastructure for the area covered by South West Trains. There are still many issues to be sorted out and this arrangement is still fraught with possible risks. Nevertheless, this may well serve as a model for others that are largely separate from others and have one main operator. Moreover, the franchise network is being redesigned to accommodate this, with, for example, ten new East Coast franchise possibly incorporating many regional services on the route. In a separate development,   Chris Gibb, Virgin Trains’ Chief Operator, has been seconded to Network Rail because of poor performance on the Rugby – Euston section. So the distinction between Network Rail and the operators is being blurred and no one knows how far this will go.

It is not, therefore, inconceivable that an incoming Labour government would go one step further and simply not let franchises that expire. However, with many franchises about to be let for 15 years, it may be that timing will defeat any such radical plans. That does not stop people still thinking fondly of recreating a nationalised railway but even if they get their wish, it would be a very different beastie from the British Rail which elicits such conflicting memories.



Cleaner windows at Network Rail?


Sometimes modern business jargon seems almost like a parody of itself. In the real world, surely someone just appointed as ‘Head of Transparency’ would, be responsible for cleaning the office windows. Not so in the corporate world that we now inhabit. The appointment of  Network Rail’s new head transparency, Mark Farrow, is indeed welcome but one wonders what, once a few bits of information have been published, he will be doing all day long. The press release announcing the creation of his job talked of producing real time running data, costs of major projects, executive directors expenses and assessments of high risk level crossings.

While I commend the effort, it strikes me that this is pretty basic stuff that should have been available a long time ago. Moreover, Mr Farrow rather blew holes in his toes when he said in his opening statement in the press release: ‘We won’t be able to publish everything people suggest – there will be some times where security, cost or commercial confidentiality issues will intervene – but we will do everything we can to keep the scheme’s content fresh, relevant and informative’. So he’s already telling us what he is not going to do. I’d rather hear from him that he is going to bust a gut to get everything out there and challenge the ridiculous rules about ‘commercial confidentiality’ which are irksome in an industry that still absorbs £4bn or so of public money every year. Oddly, the press release did not give his salary… now that would have been a start. Indeed, if he is going to trot out the ‘commercially confidential’  excuse at every turn, then there’s not much chance of change. The fact that the publication of passenger numbers on particular routes is not possible because the figures are ‘commercially confidential’ is one of the nonsenses of the present set-up in this semi privatised industry.  Mr Farrow’s appointment suggests, too, that the so called ‘company members’ who are supposed to hold the company to account have not been up to the task. Network Rail is clearly trying to pre-empt any  wider reform, but if Mr Farrow’s rather weaselly press statement is anything to go by, the company and Mr Farrow will have to try harder.

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