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5 November 2013

Rail privatisation has failed on every count – but there is an alternative

The success of the state-run East Coast Main Line proves it's time to bring the other rail franchises under public control.

By val Shawcross

Today marks 20 years since the privatisation of the railways when the Major government passed the Railways Act. You would struggle to find anybody that believes the promises made have been met. The free-market experiment with our railways has delivered a poor service, with high fares and no sign of these increases being curbed or significant improvements to the service we receive.

When National Express withdrew from running the East Coast Main Line there were concerns that the state-owned Directly Operated Railways (DOR) would not be able to deliver a good service. But not only has DOR succeeded in doing so, it has also just returned a £200m surplus to the Treasury, rather than to shareholders. It’s time we brought the other rail franchises under public control as they come up for renewal. And while train operators might legitimately argue that DfT control of rolling stock procurement, accessibility investment and Network Rail’s control of the track infrastructure, pose constraints on their service delivery, it is difficult to see how other parts of the rail industry could be responsible for the appalling failings of rail operators. These include key customer issues such as reliability, lack of real-time customer service information and dirty trains.

It’s not just DOR which has successfully run a railway. Transport for London (TfL) took control of franchising London overground services in 2007 and is now operating with some of the highest public satisfaction and punctuality levels of any railway in the country. Whilst the Mayor needs to control his inflation-busting fare rises, TfL’s running of the Overground has been a success, scoring highly with passengers content with the service delivered. In addition, this has allowed the Overground to be worked into the wider TfL network and fully integrated, making it an even more useful part of our transport network. The key factor of local management and accountability has added real value in terms of service quality; and efficiency has been improved because of TfL’s determination to focus on the value for money the public receives as opposed to maximising shareholder dividends

Privatising the railways, with the complex and fragmented ownership and management structure that has resulted, was clearly a mistake, with even David Willetts admitting as much. The decision by John Major to follow the prescriptions of the Adam Smith Institute laid the foundations for the mess we see today. At the time we were promised a system that would improve services, with Major telling parliament in February 1993: “franchises will provide a better, cheaper and more effective service for the commuter.”

The simple fact is that in the UK we pay one of the highest public subsidies, some of the highest fares and yet receive one of the worst services in Europe. Since privatisation, fares have increased above inflation for a large number of routes and the ticketing system is ludicrously complicated. TfL has demonstrated that it is possible for a public provider to deliver high standards of service and a straight forward integrated ticketing system.

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It’s been said before, but we must keep the pressure up. DOR must be allowed to bid for the franchises as they come up for renewal. Those who want to continue with a dogmatic free-market approach must follow their own logic. If they believe private companies are superior to the public sector, why should they worry about competing with DOR? The very fact the government are allowing foreign state-backed railways to bid for our franchises but not our own state-backed company is ludicrous. This isn’t about a ‘lurch to the left’, or returning to the 1970s, this is about getting the best service at a price that is affordable for passengers.

Closer to home in London, the first step should be to give control of the commuter routes serving the capital to TfL. This is something even the ardently pro-market Boris Johnson supports. Unfortunately, he hasn’t yet been able to convince his colleagues in government to hand him the reins, but this is something that government should do. They probably worry about commuters in Kent reacting against London’s Mayor having control of some of their commuter services, but the reality is that passengers in the wider south east would see improvements in their journeys to work in London.

We can carry on down the path of current railway privatisation and accept ever higher fares, high public subsidy and poor service, but we have a choice. I don’t know about you, but 20 years from now I’d rather be discussing something else rather than why 40 years of railway privatisation has failed. Politics is about the art of the possible; it is entirely possible to allow DOR to bid for rail franchises and it is entirely possible to allow TfL to run regional services that come into London. It is about time we made it happen, otherwise we’ll see more wasted years with passengers picking up the bill for failure.

Val Shawcross is transport spokeswoman for the London Assembly Labour Group 

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