Popular support for the renationalisation of the railways is high. But is this yearning for a “better” future justified?
As a career railwayman, who has been associated with this industry for more than 60 years, I was very much involved in the fight against privatisation. The whole idea was badly conceived and implemented. Assets were sold ridiculously cheaply. The history of Railtrack was disastrous for the industry which eventually led to its renationalisation. Financial incentives led Railtrack and other unlikely companies to behave just like private firms, giving profits for their shareholders pre-eminence over their public responsibilities.
But as a railwayman, I have no wish to return to the former times of poor staff morale, lack of investment and perverse incentives. The railway has moved on in the last 20 years. Passenger numbers have increased by 130 per cent in the 20 years following privatisation in 1995-6. The freight business is unrecognisably more efficient. There is now a truly massive investment programme in new rolling stock, in track and signalling, and new stations built to, and above, international standards are opening.
This investment is the result of big increases in state and, increasingly, private sector spending. The railway is as safe as ever, particularly from the point of view of the staff, who are better paid. Morale among most railway staff is high and rising as new trains and improved track are delivered. For example, we have experienced massively improved services through Reading, always a troublesome place, and at Birmingham New Street as well as the new Elizabeth Line across London. Links between the trains and buses are improving.
Use of the railways will rise as road congestion worsens. People are unhappy about fares, but these are set by governments, not by the train operating companies. Most fares at peak times are regulated, and in the end it is for the Chancellor to decide what happens, although if a fares freeze leads to an investment freeze, we will enter an unfortunate era on a very congested network.
Some countries choose to subsidise rail fares much more highly than in Britain. Passengers here pay for their travel because this country chooses it to be so. For example, in Rail Germany received €17bn in 2014, with passengers travelling a combined 79 billion kilometres a year. In comparison, UK rail received €4.4bn in 2016, for 65 billion kilometres travelled.
Throughout my career historically, the Treasury has been reluctant to invest, not least in the Blair years, and has pushed for fares to rise in real terms often as an alternative to creating more capacity. This is not helped by the sometimes poor management of the railway leading to accusations of waste and incompetence.
But good management depends on a supply of competent and well trained staff and these shortcomings are being dealt with through measures including the involvement of far more apprentices who move on to higher things. Investment is now flowing at record rates.
The government, which of course already owns Network Rail, is committed to a five year cycle of investment and the franchised train operators are bringing huge private sector investment into rolling stock and infrastructure. This is partly as a result of a better grasp of how the industry works and better understanding from civil servants, and also partly thanks to keen competition in the franchise bidding process.
So what would happen if an incoming government were to announce its intention to renationalise the railways? There would be a huge loss of focus on the proper management of the system.
Many of the gains of the last few years would be in jeopardy as managers thought less of service improvements and more about how they would fit into any new system. There would be an immediate decline in product innovation, development, marketing and training. Investment would decline sharply as the Treasury met more pressing demands for public expenditure.
Any franchise taken into public ownership would be at the mercy of the Treasury as far as investment is concerned and we all remember how parsimonious they were towards public transport in the past. Things are set to improve as they are and in my view, it would be a foolish and very costly move to go back to state ownership. To quote one of my distinguished predecessors “if you reorganise an institution, it bleeds. Don’t do it”.
Lord Bradshaw is a former British Rail executive and academic specialising in transport