Public ownership will not solve rail fiascos
AS A long-suffering commuter on Southern Rail of 16 years’ standing (often literally) I really ought to be counting the days until the industry is taken back into public ownership. The latest fiasco on the East Coast Mainline where the Transport Secretary Chris Grayling has decided to kick out the operator StagecoachVirgin almost immediately, should surely hasten that moment.
As a sop, incidentally, the same two companies have bizarrely been granted a further two-year extension to their lucrative franchise on the west coast route without even having to compete for the privilege. But that’s the railways for you.
It is the passenger who has suffered the brunt of Southern’s inability to run a train service worthy of the name.
But it is the taxpayer who has been short-changed on the East Coast where Stagecoach-Virgin will escape payments to the Government of £2 billion by surrendering the keys early.
Scarcely surprising, then, that the whole debacle is being investigated by the National Audit Office (NAO).
There is a grisly inevitability about what the NAO is likely to conclude. You would certainly not want to be in Grayling’s shoes, supposing he is still in post when the audit watchdog reports. His walked out thanks to a combination of management hubris and government duplicity.
Labour was in full and predictable cry after the Grayling announcement. But those who believe these two basket cases make the argument for railway renationalisation should be careful what they wish for.
Admittedly, it is an idea that commands widespread popular support. But does anyone seriously think the railways were better run in the halcyon days of state ownership?
They were starved of investment, having to plead for cash from the same pot that funds schools, hospitals, the armed forces and much else.
In the five years that preceded privatisation there was virtually no investment in new trains. Since privatisation, more than £10 billion has been spent on new rolling stock.
Notwithstanding the terrible tragedies of Ladbroke Grove, Potters Bar, Hatfield and Southall, the railways are also a good deal safer today for passengers and workers alike.
And they are a great deal more popular than they were. Passenger journeys have doubled to 1.6 billion a year in the 18 years since privatisation, despite ever-rising fares.
The last time the East Coast was run by the state in the guise of Directly Operated Railways it hardly set the gold standard for train travel.
In any event, a large chunk of the railways is already in state ownership. Network Rail, whose chief executive Mark Carne is also heading for the sidings, runs the tracks, signalling and stations and is a public sector armslength body, its borrowings underwritten by the taxpayer.
Those who advocate nationalising the rest of the industry need to explain how the £8 billion of assets owned by the rolling stock companies would be brought under public control.
Belatedly, Grayling has recognised that the old franchising system was broken. Recent franchise competitions have given as much weight to the quality of the bids as the amount of money on the table.
And we are promised a new ‘East Coast Partnership’ from 2020: a joint venture between the public and private sectors, operated by a single management under a single brand overseen by a single leader. It is a move in the right direction because the solution to the industry’s ills lie in its structure, not its ownership.
Then again, Grayling is yet to work out who will run the East Coast in the shortterm, much less tell us how his grand partnership will work in practice.
The railways have always been a place where politicians would rather travel hopefully than actually arrive.