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11 September 2015

Revealed: the Tory plan to privatise even more of our railway network

Quietly, the Conservatives are pushing ahead to put ever larger sections of Britain's rail network into private hands, says Lilian Greenwood.

By Lilian Greenwood

Four months after the election, any lingering hopes for a period of stability on the railways have been thoroughly dispelled. First manifesto promises to electrify key routes in the Midlands and the North were unceremoniously dropped, accompanied by dubious claims of prior ministerial ignorance. Now there could be more bad news to come. Quietly, another agenda is being pursued, and although it did not feature in the Conservative manifesto, it could end with the break-up and privatisation of what’s left of our publically owned rail network.

After months of press reports of a looming sell-off, wide ranging changes to Network Rail were announced in the Summer Budget. They include the transfer of responsibilities to regional managers, channelling subsidy through train operators instead of Network Rail, and a new property body ‘to realise value from public land and property assets in the rail network.’ None of these plans will be subject to public consultation.

The disposal of property was the only explicit reference to the sale of assets. A review has been launched into the ‘future shape and financing of Network Rail,’ with the aim of precipitating a decision by the time of the next Budget. Until then, Ministers are for the most part sticking to the mantra that the Government has ‘no current plans’ to break-up Network Rail or sell-off its assets.

While the matter is officially out to review, there can be no doubt which way the wind is blowing.

When rail minister Claire Perry was asked recently whether Network Rail should be ‘re-structured or privatised,’ she only said in reply that ‘I am going to allow the Secretary of State for Transport to make strategic decisions such as that.’ Some train operators are already lobbying for such an outcome. When the ‘pause’ to electrification projects was announced, one train company seized the opportunity to argue that private rail operators should be allowed to take over from Network Rail.

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It is therefore concerning that, on the same day that George Osborne announced the Budget, Network Rail’s Chief Executive said:

‘I want to have Network Rail made up of eight regional companies or route based companies, where decisions are taken locally as much as possible, where they’re focused on the needs of local passengers or local councils, the local regions, and where they are targeted at supplying services to particular train operating companies.’

The obvious fear is that, if Network Rail is broken down into legally separate entities, those constituent companies will be seen as discrete units, ready for sale to the highest bidder.

Network Rail needs to improve, and the organisation has serious questions to answer over its costings of major projects, the Christmas chaos and the ongoing disruption at London Bridge – but more fragmentation and more privatisation are the last things that passengers need.

We have been down this road already.

Twenty years ago the Conservative Party took one of the most integrated rail networks in Europe, and disintegrated it. Rushed through with indecent haste, privatisation cost taxpayers billions as assets were sold at grossly undervalued prices.  A thousand days passed without orders for new trains, permanently damaging the UK’s rail manufacturing capacity.

A single organisation was replaced by a labyrinthine assortment of interlocking (but often confrontational) contractual relationships. The cost of unregulated tickets in particular skyrocketed, and we have been left with a ticketing system that – according to the 2011 McNulty Report – ‘is complex, often appears illogical and is hard for the uninitiated (and even the initiated) to understand.’

Most importantly of all, passengers’ safety was endangered. Railtrack, the previous privatised infrastructure manager, inexplicably divested itself of much of British Rail’s engineering expertise, and had little control over or understanding of its contractors’ activities. As a result, essential maintenance and renewals work was not done. It took years to recover the railways’ reputation after a series of fatal accidents and the speed restrictions imposed during Railtrack’s ‘collective nervous breakdown’ that followed.

Two decades later the Tories appear to have learned nothing from the mistakes of the past. Just like last time there will be no Green Paper, no public consultation. It is impossible to say how far or how widely the unintended consequences could range, but it is concerning that Ministers have refused to say whether important testing and research facilities will be exempted from sale. Freight operators rightly fear that, if passenger franchise holders are allowed to take over sections of the network, they will be denied fair access for their services and that operating services that cross route boundaries will become much more difficult, undermining rail freight’s competitive advantage over less environmentally friendly road hauliers. Worse still, there would be no public mandate at all for a sell-off (rail privatisation did, at least, feature in the 1992 Conservative manifesto).

The tone of the Government’s statements implies that easy receipts to the Exchequer are being prioritised over sustainable growth and passengers’ best interests. It would be an act of the basest cynicism to use Network Rail’s present difficulties – for which Ministers share a heavy burden of responsibility – as a pretext for a new round of sell-offs.

There is a better way. The rail network needs more strategic oversight and integration of services, not less. We need ministers to reform our Byzantine ticketing and compensation rules, to get on with delivering major projects, and make sure that the success of Merseyrail and London Overground can be replicated in other cities and regions. These should be amongst the Government’s top priorities for the railways, not another round of unneeded, unwanted and ill-thought through privatisation. 

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