Get Things Back On Track

Over on Comment is Free, Neil Clark writes:

"Whichever way one looks at it, privatisation is a giant asset-stripping process. It is a very efficient way of taking money out of taxpayers' pockets". Gwyneth Dunwoody, the Labour MP who uttered those words during a debate in parliament on rail privatisation in February 1995, deserves some sort of posthumous New Year honour for calling it exactly right.

While Tory ministers claimed that selling-off the railways would bring "benefits to passengers and taxpayers", and scoffed at opposition concerns, the latest above-inflation price increases in Britain's rail fares – already by far and away the highest in Europe – show once more that the serial privatisers of John Major's Conservative government got it very, very wrong.

Selling off the railways was a bad idea in principle, as it transformed them from being a public service to a business, where the overriding aim was profit maximisation. But, having set their minds on privatisation, the least damaging thing the government could have done back in the mid 90s would have been to simply float shares in British Rail or, failing that, create four regional franchises in charge of both trains and track – the system that existed before nationalisation in 1948.

Instead the Major government, taking its cue from the ideas of the Adam Smith Institute, hit upon an incredibly complex and costly system, which destroyed the integrity of the rail network and created the ridiculously fragmented and passenger-unfriendly system we have today. Ownership of Britain's railway tracks was handed over to a new company, Railtrack, which was privatised in March 1996 with disastrous repercussions for rail safety. Twenty-five new railway franchises were created, with the new railway operators having to hire their rolling stock from three newly created Rolling Stock Leasing Companies (ROSCOs), largely owned by banks.

With privately owned train companies, eager to pay sizeable dividends to their shareholders, also having to pay the leasing companies to hire rolling stock, and to use rail lines, it's not hard to work out why our train fares are so much higher than in the countries in continental Europe where there is one state-owned railway company and where neoliberal ideologues and thinktanks don't dominate the political scene.

Privatisation was supposed to reduce government support for the railways and bring the benefits of "competition" to passengers: the reality is that it has done the very opposite. Taxpayer subsidies to the railways are around five times higher than in the days of British Rail, while ticket prices have rocketed since 1996. Privatisation has indeed brought "benefits", but it's been to shareholders and the banks, certainly not to ordinary people.

The drive to privatise the railways came from the Conservatives' opposition to all forms of public ownership. How ironic, then, that a decade and a half on from privatisation, a sizeable chunk of our railways is back in public ownership – but the public ownership of other countries. Arriva Trains, which is cutting four and a half hours off its off-peak travel period, is owned by Deutsche Bahn, which also owns Britain's largest rail freight company, DB Schenker Rail. NS, the Netherlands state railway, is, through its subsidiary, a joint owner of Northern Rail and Merseyrail and from February will run the Greater Anglia franchise.

Our political elite, still wedded to 1990s thinking, tell us that bringing back British Rail is out of the question, yet they seem quite happy for state-owned railway companies from other countries to run services in the UK – and for British passengers to effectively subsidise lower fares in other countries. What a crazy state of affairs.

As fares are hiked once again, it is time for rail passengers and taxpayers to use their collective might to pressurise our politicians to rethink their support for privatisation. Join the protests due to take place at Britain's railway stations from tomorrow and help get renationalisation back on the political agenda.