Labour‘s election dilemma.
The General Election will put the spotlight on Labour’s nationalisation plans, but the party would be better served addressing other rail issues, says CHRISTIAN WOLMAR
RAILWAYS rarely figure in General Election debates. Even when the Conservatives set out their (admittedly vague) plans to privatise the railways in 1992, there was precious little discussion, even though the subsequent breakup of British Rail and the sell-off later became a major area of political controversy.
While I don’t think that the future of the railways will be discussed that much on the doorstep, Labour will be tempted to use renationalisation of the railways as a centrepiece of its policy. It is one of the issues that Jeremy Corbyn mentions frequently in speeches. His advisers are also enthusiastic, pointing out that in polls more than two-thirds of respondents would like to see the railways renationalised.
However, I would caution the Labour leadership not to put too much emphasis on an issue that is highly likely to disappoint its proponents. The fundamental problem is that in 2017, it is impossible to re-create the best aspects of British Rail because that has been irreparably broken up.
For example, we will not be able to have that excellent cohort of senior managers who had undertaken every job on the railway, from assistant station master at Little Puddleton-onSea to being in charge of train operations at London Waterloo.
Nor will it be possible to re-establish the financial disciplines that served BR well when introducing improvements at a reasonable cost, such as electrifying the East Coast Main Line, which is such a contrast with today’s failures of project management. The Humpty Dumpty railway is in bits and pieces, and it is impossible to stick them back together again.
Therefore, Labour faces the question of what would ‘renationalisation’ mean in practice? After all, Network Rail is already renationalised and subject to considerable Government scrutiny. Although it is in many ways completely dysfunctional, overspending on projects and failing to deliver them on time, this has less to do with the structure of its ownership, but rather is down to the management skills… or lack of them.
The rolling stock is owned by three private companies, and there is no way that any sensible government would be able to buy it back. Of course, new deals could be done through direct purchase - as Transport for London and Merseytravel have done - but it would take decades before the stock is all in public hands.
The third element of the railways, the operations, is therefore the key battleground. Labour has said it wants to take the ownership back in-house, but the problem is that many deals have been signed stretching into the 2020s. Again, there is no way that a responsible government could rescind these contracts, as the compensation payments would be prohibitive. Therefore, the best an incoming Labour Government could do is wait for franchises to run out and not let them out again.
This is permissible under the Railways Act 1993, whereas (oddly) public sector organisations are not allowed to bid for franchises. Therefore, change will come about only slowly. It will be impossible for Labour to claim to be able to ‘renationalise’ the railways quickly, and nor will it be possible for a new Labour Government to do much about the current structure of the railways for a considerable time.
Labour does, of course, have a skeleton in its cupboard - its relationship with the unions. Few people are probably aware that the RMT is actually no longer associated with Labour, because the party - even under Corbyn - is not left-wing enough for its tastes. Nevertheless, the disruptions caused by strikes over the past year or so will undoubtedly stimulate some Conservative attacks on Labour in the regions affected, which now include the party’s northern heartlands.
The other parties are likely to say little about the railways in the forthcoming election. The Tories will be loath to mention them knowing that their biggest project, HS2, has little support either in the party or among the public. It is far too early to be singing its praises before a sod has even been turned (apart from a few minor preliminary works). They are vulnerable on the issue of fares, but few are likely to determine their vote on the basis of their railway policy.
Indeed, that is where Labour’s enthusiasm for renationalisation is, in a way, rather irrelevant. While many favour taking back the railways into state ownership, a survey found that only 3% are likely to base their vote on the issue. In other words, renationalisation is in the ‘nice to have’ rather than the ‘definitely want’ category.
None of this is to say that the current structure works well or does not need
“Reform should be more about building Network Rail’s capacity to manage projects, to reintegrate the railway as much as possible, and to move away from the ideological commitment that franchising is the only way to run the railway.”
overhaul. I spend many of these columns writing of the failings of the system, and there is no doubt that allowing the franchises to run out and bringing them back in-house would save money.
Moreover, there is a real need for an organisation that sits between government and the railways. The abolition of the Strategic Rail Authority was prompted by the failings of its management, rather than any coherent analysis of the best structure for the railways. Having the Department for Transport run the railways directly is unprecedented in history and clearly unsatisfactory on so many levels, from rolling stock procurement and project planning to fares policy and franchising.
There is an urgent need for a new railway organisation, and Labour would be much better pushing that idea rather than making promises over the benefits of rail renationalisation. That will not get Corbyn a seat on an overcrowded train, as he implied in his botched attempt to highlight the issue on his YouTube broadcast, when he was filmed sitting on the floor on a train that was not full.
However, reform should be more about building Network Rail’s capacity to manage projects, to reintegrate the railway as much as possible, and to move away from the ideological commitment that franchising is the only way to run the railway. Labour should focus on other aspects of railway policy and transport, rather than simply parroting the mantra of ‘renationalisation of the railways’. The incomprehensible and at times expensive fares structure is an issue worth addressing, as are the massive cuts in bus services across the country.
Of course, the odds of an outright victory for Labour are the sort that were offered for Leicester winning the Premiership last year, and that sort of thing rarely happens twice in a lifetime. Nevertheless, this is an important issue - it is part of an ongoing debate that never seems to go away. I have mentioned before in this column that in writing my book Blood, Iron
& Gold a few years ago about the world’s railways, I came across a debate in the Italian parliament in the 1870s about rail privatisation: the Right supported it and the Left opposed it.
I am, of course, a Labour supporter and want the party to do well in the forthcoming General Election. That means thinking through policies, rather than merely repeating sound bites that appear attractive but are not deliverable.