Labour peer and former transport secretary Andrew Adonis, who renationalised the East Coast Main Line in 2009. Photograph: Getty Images.
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Andrew Adonis: East Coast Main Line could still be saved from privatisation

Former transport secretary says that the "chronic incompetence" of the government means "there’s a very good chance that the contract won’t be let by the election".

When Labour renationalised the East Coast Main Line in November 2009, it did so out of necessity rather than conviction. The private holder of the franchise, National Express, had defaulted on the £1.4bn contract agreed with the government just two years earlier and the then transport secretary, Andrew Adonis, was “not prepared to bail out companies that are unable to meet their commitments”. Adonis, who was nicknamed “the thin controller” by the industry, suggested that the franchise would be “re-let again to a new private operator” by mid-2011.

Three years later, the coalition government is in the process of doing just that but Labour’s voice is raised in protest. East Coast, the publicly owned train operating company established by ministers as an operator of last resort, has proved more successful than almost anyone anticipated. It has cut journey times, carried more than a million extra passengers and achieved the highest customer satisfaction of any rail company. Free of the need to pay dividends to private shareholders, it has also returned £640m to the Treasury to reinvest in the service. In 2012, Virgin Trains received seven times as much in taxpayer subsidy to run the West Coast Main Line.

“There’s a great esprit de corps among management and staff,” Adonis told me when I asked him to explain East Coast’s remarkable performance. “They haven’t had to work to an impossible business plan, which was the big problem with National Express before. All of those factors have contributed to good performance and a strong, self-confident public company.” The Conservatives’ desire to reprivatise the line was, he suggested, based on pure ideology. “They don’t like the concept of a successful state company and they’re keen to kill this idea before it gains traction and might gain other franchises. The other private-sector companies are also very anxious that East Coast is abolished before the election, so that it provides  less competition to them for future franchises.”

But with the government aiming to complete the privatisation by February 2015, Adonis, who is now Labour’s shadow infrastructure minister and is leading the party’s growth review, warned that ministers are short of time.

They’ve got literally only a few weeks of leeway, and given the chronic incompetence of the Department for Transport in letting recent contracts, I think there’s a very good chance that the contract won’t be let by the election. And if East Coast continues to exist as a company at the election then I’m sure Labour would want to keep it in operation as a state company.

Some in Labour have suggested the party could incrementally renationalise  the railways by taking franchises back into public ownership as they come up for renewal (an option supported by 66 per cent of the public according to a YouGov poll last November, with just 23 per cent opposed). “I don’t use the language of renationalisation but of fair competition,” Adonis told me. “My view is that the performance of East Coast as a state company is sufficiently strong that it would stand a good chance of being able to win future franchises on a fair basis. And, of course, because it doesn’t have to pay dividends, it has a substantial financial advantage.”

He concluded: "I would say at the moment, given the catastrophic performance of the government in handling the West Coast franchise, and the fact that the lawyers will be deeply nervous about legal challenges to the franchising process next time round, I think there’s a very good chance that East Coast will still be a public company by the time of the election."

The irony is that a government ostensibly committed to competition is, in this instance, determined  to quash it. But even the Tories’ aversion to public ownership has its limits: one of the three approved bidders is the foreign firm Keolis: 56.7 per cent owned by the French state.

ClarificationVirgin Trains has asked us to clarify that it received no net subsidy for running the West Coast Main Line in 2012 and paid a premium of £168m to the Treasury. The figures cited in the piece, 'seven times as much in taxpayer subsidy to run the West Coast Main Line', referred to the net subsidy paid to Network Rail for maintenance of the rail infrastructure minus the premium generated by Virgin Trains.

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Now listen to George discuss the possibility of renationlising the railways on the NS podcast:

George Eaton is political editor of the New Statesman.

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Leader: Trump's dangerous nation

From North Korea to Virginia, the US increasingly resembles a rogue state.

When Donald Trump was elected as US president, some optimistically suggested that the White House would have a civilising effect on the erratic tycoon. Under the influence of his more experienced colleagues, they argued, he would gradually absorb the norms of international diplomacy.

After seven months, these hopes have been exposed as delusional. On 8 August, he responded to North Korea’s increasing nuclear capabilities by threatening “fire and fury like the world has never seen”. Three days later, he casually floated possible military action against Venezuela. Finally, on 12 August, he responded to a white supremacist rally in Virginia by condemning violence on “many sides” (only criticising the far right specifically after two days of outrage).

Even by Mr Trump’s low standards, it was an embarrassing week. Rather than normalising the president, elected office has merely inflated his self-regard. The consequences for the US and the world could be momentous.

North Korea’s reported acquisition of a nuclear warhead small enough to fit on an intercontinental missile (and potentially reach the US) demanded a serious response. Mr Trump’s apocalyptic rhetoric was not it. His off-the-cuff remarks implied that the US could launch a pre-emptive strike against North Korea, leading various officials to “clarify” the US position. Kim Jong-un’s regime is rational enough to avoid a pre-emptive strike that would invite a devastating retaliation. However, there remains a risk that it misreads Mr Trump’s intentions and rushes to action.

Although the US should uphold the principle of nuclear deterrence, it must also, in good faith, pursue a diplomatic solution. The week before Mr Trump’s remarks, the US secretary of state, Rex Tillerson, rightly ruled out “regime change” and held out the possibility of “a dialogue”.

The North Korean regime is typically depicted as crazed, but its pursuit of nuclear weapons rests on rational foundations. The project is designed to guarantee its survival and to strengthen its bargaining hand. As such, it must be given incentives to pursue a different path.

Mr Trump’s bellicose language overshadowed the successful agreement of new UN sanctions against North Korea (targeting a third of its $3bn exports). Should these prove insufficient, the US should resume the six-party talks of the mid-2000s and even consider direct negotiations.

A failure of diplomacy could be fatal. In his recent book Destined for War, the Harvard historian Graham Allison warns that the US and China could fall prey to “Thucydides’s trap”. According to this rule, dating from the clash between Athens and Sparta, war typically results when a dominant power is challenged by an ascendent rival. North Korea, Mr Bew writes, could provide the spark for a new “great power conflict” between the US and China.

Nuclear standoffs require immense patience, resourcefulness and tact – all qualities in which Mr Trump is lacking. Though the thought likely never passed his mind, his threats to North Korea and Venezuela provide those countries with a new justification for internal repression.

Under Mr Trump’s leadership, the US is becoming an ever more fraught, polarised nation. It was no accident that the violent events in Charlottesville, Virginia, culminating in the death of the 32-year-old Heather Heyer, took place under his presidency. Mr Trump’s victory empowered every racist, misogynist and bigot in the land. It was doubtless this intimate connection that prevented him from immediately condemning the white supremacists. To denounce them is, in effect, to denounce himself.

The US hardly has an unblemished history. It has been guilty of reckless, immoral interventions in Vietnam, Latin America and Iraq. But never has it been led by a man so heedless of international and domestic norms. Those Republicans who enabled Mr Trump’s rise and preserve him in office must do so no longer. There is a heightened responsibility, too, on the US’s allies to challenge, rather than to indulge, the president. The Brexiteers have allowed dreams of a future US-UK trade deal to impair their morality.

Under Mr Trump, the US increasingly resembles a breed it once denounced: a rogue state. His former rival Hillary Clinton’s past warning that “a man you can bait with a tweet is not a man we can trust with nuclear weapons” now appears alarmingly prescient.

This article first appeared in the 17 August 2017 issue of the New Statesman, Trump goes nuclear