A return to British Rail? Rail Professional opinion


Katie Silvester, Editor L


abour is considering adopting a policy of renationalising the railways, following the release of a report called Rebuilding Rail, financed by the rail unions. The report claims that public subsidy of the


railways has more than doubled since privatisation, when figures are adjusted for inflation. That is in spite of large


increases in many fares. In many ways, a decision to renationalise the railways would be a logical conclusion of the McNulty value-for-money study. McNulty compared Britain’s railways to other – state owned – railways in Europe and found that our railways ought to cost 40 per cent less to run. But a Conservative-led coalition was hardly going to accept that a return to state ownership was the way forward, so instead the government-sponsored McNulty report recommended tinkering around the edges to reduce costs instead. In fact, Sir Roy McNulty would have been hard pushed to find another


privatised railway in Europe to do a cost comparison with – there aren’t any. Despite the EU initiatives to liberalise Europe’s railways, no other country entirely privatised its railways in the way that Britain did. What has tended to happen in other countries is that the former - state owned - organisation has continued to run the railways, albeit with some structural changes in order to comply with EU law. In the Netherlands, for example, the state operator Nederlandse Spoorwegen


was split in two in 2003, with a new body, ProRail, taking care of the infrastructure and NS continuing to run the trains. Privately owned companies now hold concessions to run some services, but the vast majority of the country’s services are still operated by NS, which remains in state ownership. The Netherlands toyed with the idea of turning NS into a private company but eventually abandoned the idea. Germany did a similar thing, ditching plans to privatise Deutsche Bahn due to the economic downturn. Thanks to privatisation, Britain now has the most expensive rail fares in


Europe, but not because public subsidies have fallen, rather because private companies hive off the profits for shareholders. The fragmented nature of the UK’s railways also increases its costs, as McNulty found, because there are unnecessary costs at the interfaces between all the different companies involved. The East Coast Main Line now has to be accessed by several different Tocs and freight operators, two open access operators and more than one division of Network Rail. Previously just one organisation – British Rail – ran the whole show. So should Britain abandon privatised railways altogether and renationalise


the whole lot? There’s surely a middle ground here, where we can keep the good bits of privatisation and take the rest back under state ownership. Franchises like Chiltern that have brought investment in new infrastructure and have found a solid business case to make it work is a model that could be repeated. Freight and open access operators have also revitalised aspects of the railway that had been in decline and could continue operating as they do now. Network Rail is practically in the public sector already. But parts of the network that are currently subsidised could surely be run more cheaply if they were run by the state. At the moment, subsidies have to be provided at a level where they will make a profit for the franchisee – no private company would get involved otherwise. A nationalised entity would not need to make profits in these areas. So will Labour adopt a policy of renationalisation? It


would be a brave move, as Labour so strongly backed private sector investment in public services in the Blair/Brown era. We will wait with interest.


PAGE 4 AUGUST 2012


News in brief


‘Conserve Bristol Harbour railway’ call


Plans to concrete over Bristol harbour railway, converting it into a busway, should be rejected, Nigel Bray from campaign group Railfuture has urged. At a public inquiry into the controversial Bristol bus rapid transit scheme in June, he said with the potential of light rail, it would be a mistake to waste such a valuable transport asset.


£65,000 fine imposed over runaway train


Southeastern boss Charles Horton has insisted safety measures have improved since a runaway London to Hastings train with ‘not enough sand in the brakes’ shot through a level crossing in November 2010. In July the company was fined £65,000 at Maidstone Crown Court, and ordered to pay £22,589.50 costs, for breaching health and safety rules.


Good safety record continues There were no train accidents, passenger or workforce fatalities on the UK’s railways during the financial year 2011-12 for the fifth year running, according to the Annual Safety Performance Report. But four passengers died in station incidents, the Rail Safety and Standards Board report said. There were 1.46 billion passenger journeys – eight per cent up on 2010-11.


RMT lambasts transport bosses’ pay The ‘big five’ private transport operator bosses have pocketed average annual pay of £1m each – a nearly 20 per cent increase – claims transport union RMT. As bus and rail passengers face six per cent plus fare hikes and service cuts, news of bumper pay packages ‘will be greeted with anger and dismay’, says the union.


Profits rise for Stagecoach Stagecoach, which holds the franchises for South West Trains and East Midlands Trains, as well as having a share in Virgin Trains, has seen its revenue rise from £2.3m to £2.4m for the year ending April 2012, compared to the previous year. Profits rose from £2.4m to £2.6m.


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