In recent years the mere mention of Britain’s railways has prompted grim laughter. For too many commuters, the simple act of travelling to and from work is an ordeal characterised by repeated delays, cancellations and overcrowding. Yet at the start of this year, rail fares increased by 2.7 per cent.
In this context, High Speed 2 (HS2) appears misguided. The proposed rail link between London, the Midlands and the North is now expected to cost as much as £106bn, compared to an original estimate in 2012 of £32.7bn, with the first trains not due to run until 2028. Added to this, a leaked report suggests the projected economic benefits of HS2 have fallen from £2.30 for every £1 spent in 2017 to between £1.30 and £1.50 for every £1 spent this year.
Yet on 11 February, while conceding that its costs had “exploded”, Boris Johnson announced that the project would proceed. That he did so was unsurprising. Ever since his time as mayor of London, Mr Johnson has revered grands projets, such as the Thames Estuary airport (which never happened).
But the potential benefits of HS2 are more convincing than one’s man ambition. The principal justification for the project is not that it will reduce journey times between major cities but that it will dramatically expand capacity. At present, intercity and local services compete for space on the UK’s overcrowded Victorian-era rail lines. By transferring express trains to a new line, HS2 will liberate space for commuter and stopping services and reduce dependence on environmentally harmful car journeys and short-haul flights. The HS2 project may have been ineptly managed, but if it did not exist the UK would need to invent something like it.
For now, as Jason Cowley writes this week, Britain’s railways remain a source of national shame. The wholesale privatisation of the railways between 1994 and 1997, which was hailed by the right as a panacea, ever more appears a disastrous policy error. Next month, Northern Rail will become the second rail franchise to be renationalised in less than two years after near-daily chaos. In June 2018, the East Coast Main Line was returned to public ownership when its private operators – Virgin and Stagecoach – defaulted on payments. Rail experts warn that other franchises may soon be renationalised out of necessity.
The irony is that the British government has long tolerated state ownership of rail services – provided that the states in question are foreign ones. Even now, the majority of franchises are run by overseas owners, including the French, German, Dutch, Italian and Chinese states. Through payments that far exceed pre-privatisation levels, UK taxpayers and passengers inadvertently subsidise foreign governments.
This farcical arrangement is symptomatic of the weaknesses of Britain’s economic model. No other major Western country has allowed so many of its strategic industries, assets and pre-eminent companies to fall into foreign ownership, or been so neglectful of basic infrastructure. Overseas firms in 2017 accounted for 34 per cent of the turnover of non-financial businesses, and 50 per cent of the UK stock market is owned by foreign capital.
Since entering power, Mr Johnson has shown signs of revising this approach. His government has abandoned the once-cherished ambition of an annual budget surplus in favour of borrowing for investment, and has embraced public ownership on pragmatic grounds. Though conservative thought has for decades been dominated by laissez-faire economics, there is a richer tradition which recognises the corrosive effect that untamed markets have on civil society.
But as Adrian Pabst, author of The Demons of Liberal Democracy, writes this week, Mr Johnson’s selective embrace of Keynesianism represents “not so much a realignment of British politics as a repositioning of the party”.
The Prime Minister, an inveterate opportunist, has recognised the public turn against austerity and unchecked market rule. But his uneasy fusion of free-trade globalism and national populism does not offer a coherent vision of economic renewal or indeed the common good.
This article appears in the 12 Feb 2020 issue of the New Statesman, Power without purpose