Who to blame for the railway crisis

Nothing better illustrates the weaknesses of Britain's public culture - the chronic short-termism, the obsession with the trivial and the ephemeral, the faith in meaningless gestures, the disdain for expertise - than the latest crisis on the railways. Railtrack managers say that track and signalling are in such a state that they must run fewer trains to preserve a modicum of reliability. The Institute for Public Policy Research calculates that a £180bn investment programme won't be enough. An operating company proposes commuter trains without lavatories or significant seating, rather in the style of cattle trucks. And to show that it is not just incompetent managers and greedy capitalists who can bring a railway to a standstill, we have good old-fashioned strikes, led (to the delight of Fleet Street's ineffably snobbish columnists) by men with names like Mick Rix. The solution? If you are a journalist or opposition politician, demand that Stephen Byers, the Transport Secretary, be dragged back from holiday and photographed in a grey suit, sitting behind a desk. If you are a new Labour spin-doctor, let it be known that Mr Byers, who has been in his job all of seven months, will be booted out, so that we may have our sixth (or is it seventh?) transport minister in less than five years. If you are Prime Minister, call in Lord Birt, and assorted management consultants whose knowledge of railways wouldn't fill the back of a rail ticket.

If Lord Birt is the answer, the question must be a strange one. But British governments have always done strange things with railways. Understanding nothing of the skills needed to run the most complex and technical of all public services, they meddle, they hector, they chop and change their policies, always in the belief that some magic short cut will release them from the need to make long-term spending commitments.

They hardly ever listen to advice. The railways are a rare example where expert professional opinion largely agrees with buffet-bar wisdom. Everybody, from railway engineers through transport journalists to ordinary travellers, told the Tories that their privatisation and break-up of British Rail would be a disaster. In the same way, everybody now tells this government that its plans for the London Underground will be a disaster. Why do politicians think they know better? Hardly ever using public transport themselves, least of all in rush hours, they form policy according to modish preconceptions: the future lies with the motor car; or the private sector can always do better; or public-private partnerships are smart; or we've reached the limits of what people will pay in tax; or e-mail will allow everybody to stay at home anyway.

New Labour, supposedly dedicated to "what works", has still to grasp that the private sector does not work for railways. It would deliver, we were assured, more investment, and fewer cost overruns. It did nothing of the sort. The modernisation of the West Coast main line, to be financed largely from public subsidy, began as a £2.2bn project at Railtrack's birth and had turned into a £7bn project (at least) by its death. (The East Coast modernisation, carried out under BR in the late 1980s, was completed on time and on budget.) We are told that privatisation has led to a railway revival, with dramatic increases in passenger numbers; in this sense, we are asked to believe, the privatised railways are a victim of their own success. This is piffle on stilts. The growth in rail travel - which is largely confined to the south-east - is the result of an economic boom and a choked road system, not because of public enthusiasm for Virgin Trains or Connex South Central.

We are told that, despite Hatfield, the railways are now safer than they were under BR. This may be statistically true, but, as airlines know, safety statistics get you nowhere. Even the operators of the network lack confidence in its safety, never mind the passengers. The loss of a unified safety regime, and the dispersal of engineering expertise, has left the railways in such terror of a big disaster that they dare not run the present inadequate system at anything like capacity.

We were assured that privatisation would tame the unions. On the contrary, as the present wave of strikes shows, it has strengthened them. Unions have been able to play off one train operator against another; they have also exploited the private companies' reckless early cost-cutting that has now left the industry short of around 1,000 drivers.

And so on and so on. Do not blame the unions for the latest crisis on the railways; the private operators are as incompetent and as short-sighted in their industrial relations as they have been in everything else. Do not blame Mr Byers personally for the latest crisis on the railways; he at least had the courage to stop Railtrack continuing to fleece the taxpayer on behalf of its shareholders. Blame the Tories for privatisation, the most foolish policy pursued by any government since Suez. Blame new Labour for its scandalous neglect of transport in its first term. Blame Tony Blair for creating a political climate that more or less forced Mr Byers to rule out renationalisation - the best option - simply because we would not now have to wait up to a year for ministers to sort out the new ownership. Blame the Labour MPs and private pollsters who, astonishingly, failed to convey to ministers the extent of public anger about the railways - so that Mr Blair scarcely mentioned them during the 2001 election campaign. Only a ruling elite with a tin ear for public opinion could delay improvements to the London Tube for five years while it pursues arcane arguments (complicated by an ancient political vendetta) over who should run it and fund it.

Blame, above all, a short-termist, gimmick-ridden political culture that refuses to take public services seriously. British ministers and business leaders continue to pat themselves on the back as our economy pulls ahead of Continental rivals. But they have functioning health and transport systems; we have the Dome. They have invested, wisely and steadily. Britain is only beginning to reap the consequences of failing to do so.

This article first appeared in the 14 January 2002 issue of the New Statesman, A kosher conspiracy?

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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.