Thursday, September 28, 2006

Musings From The Window Of A Virgin Train

Sitting on a train between Macclesfield and Stoke-on-Trent heading home to see the parents inevitably turns my thoughts to transport policy. My relationship with the railways is an unusual one; my father has worked for BR/Railtrack/Network Rail pretty much since I was born, and as a result I have enjoyed free rail travel throughout the United Kingdom. That freedom allows you to do things no sane person would ever seriously attempt (the nine-hour journey I took from Plymouth to Gloucester via Reading and Birmingham in order to ensure that I saw England beat Germany 5-1 being just the pinnacle of a long list of strange trips undertaken).

The one drawback to such a relationship is that it rather removes the moral right to complain. But then, to be honest, I’ve not had much to complain about. Equally, a lot of that has been down to flexibility and forward planning rather than actual performance on behalf of the train companies.

Ultimately, however, the analysis of railway privatisation has to come back to how the system has performed against the promises of 1994. Are the trains cleaner and more modern? Yes. Are the stations cleaner and more modern? Yes. Are the trains better? No. Have we saved the billions of pounds of subsidy we used to give to British Rail? Not on your nelly…

Now, I’m not so left wing as to believe all privatisation was evil; my main objection to most privatisations is that the model used was fundamentally flawed (an argument to which we’ll return to in later episodes). In the case of the railways we get double trouble; not only is the model the worst of the lot, but after the chaos of 2001 it could almost appear that things are all right now. Instead, we are paying an enormous premium for the illusion of stability.

The real issue is that rail privatisation contravened Aubrey’s Law of Responsibility; namely, government should never give up managerial responsibility for any service the absence of which they will get the blame for. I’m sure that one of the ways in which privatisation was sold to ministers in the early days was that people would quickly understand that any problems were now the fault of the private company and not the government. That was true when the system was in good condition when everything was sold, but in the case of the railways, not only was the system in crisis, but the privatisation was specifically designed to make things worse.

The train operating companies spotted the problem very quickly; under the system as originally designed, Railtrack made a profit from track use fees, the companies made a profit from the tickets. However, with the infrastructure in such a state of decay, Railtrack had to raise the track fees to make the necessary investment in renewal. Doing that reduced the profits of the companies to the point where they had to consider reductions in services. As the blame had not moved from government to operators, reductions in services were not an option politically, hence the government had to step in and subsidise both Railtrack and the operators.

Then Hatfield happened and the whole system crashed down on Railtrack’s head. The post-Hatfield settlement ostensibly removed the critical issue from the system whereby Railtrack became Network Rail and ceased to need to make a profit. The trouble is, Network Rail still needs to get more money out of the operators; the only difference now is that the motive is not that of profit, but that of politics, i.e. the requirement of the government that it cease to have to subsidise the whole thing.

The result, then, is a settlement that is essentially no better than the original one, with the exception that it is now underwritten by HMG. What’s more, the government’s efforts to withdraw are now doomed; by stepping in, they have essentially admitted that they will always have ultimate responsibility under the current system. Responsibility has moved, but the blame is simply never going to. Under those circumstances, it may not even be possibly to simply reform the system as is; we may have to consider the nuclear option as the only temporary fix.

The answer, to my mind, is essentially the South Eastern Trains solution; renationalise for a short period, then re-privatise under a fundamentally different model. Whatever that model may be, it must recognise that the aim of railway privatisation is not that the railways compete against each other; it is that the railways compete against the roads and, particularly, against the enormous and environmentally catastrophic rise in internal air travel. Only when we accept that truth will we finally start working to a truly integrated transport policy.

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