The nationalisation myth

BRITAIN’S privatised railways are far from perfect — the problems on the East Coast Main Line are clear evidence of that — but they are better than when the state ran them. Far better. British Rail was a joke. Old rolling stock, old track, Victorian stations, old points, mechanical signalling, dirty carriages, late trains and famously curled sandwiches.

There was one very simple reason. The railways were starved of finance because they were operated by the state. If British Rail needed investment to modernise, they had to beg the Treasury for money and the Treasury usually said “no”. Such spending went on the Public Sector Borrowing Requirement (as all government spending does) which was already massive and a headache for the UK economy.

British Rail could not borrow money on the open market to finance anything. The privatised railways CAN borrow money, like any private company. Hence new rolling stock, fast tilting trains, new smooth track, modern clean stations, electrified rolling stock, signalling and points and a reduced burden for the taxpayer. Privatisation overcame decades of investment neglect, almost immediately.

So why would anyone wish to return to nationalised railways? A system condemned by its own self-evident failure. You wouldn’t, would you? That is, unless your name is John McDonnell, Labour’s proudly Marxist Shadow Chancellor, who claims his nationalisation plans would be “cost-free”. What? Independent research estimates the cost would be “£90 billion”. Pardon? Just where is that money coming from John?

Successful nationalisation might be a myth; £90 billion we haven’t got, certainly isn’t.