Competition, not Nationalisation, is the Solution to Britain’s Rail Woes
During the annual Labour Party conference of 2015, the official opposition party of the UK announced a policy of rail nationalisation. This was painted as a solution to the rising fares, stagnating quality and suboptimal reliability that had characterised rail services in the UK in preceding years.
Into the 2017 General Election, as well as the 2019 local elections, Labour continues to promote rail nationalisation as the ‘cure all’ solution to the many problems facing those travelling and commuting by rail.
Immediately after the policy announcement I began to criticise the plan, even within a student community enticed by promises of a better quality, more affordable national rail service. The idea that the solution to the problems facing the rail system was a government take over seemed, to me, rather Stalinist and wholly unnecessary. Ultimately, the view that nationalisation, a practice that was tried and failed in the UK, would now effectively solve the problems of the rail franchise, appeared ludicrous to myself and many others versed in the history of British railways.
For readers who aren’t aware, between 1948 with the establishment of state-owned British Railways (latterly British Rail) and John Major’s Railways Act of 1993, the entire rail system in the UK including the track, maintenance, stations and train services were owned and operated by the UK government, with British Rail widely regarded as the most reviled public institution of its time. However, due to historically appalling standards, soaring rail fares and all-time low passenger satisfaction,
Conservative Prime Minister John Major oversaw the privatisation of British rail services and the introduction of the ‘franchise’ system, contracting regional rail services to different companies in a competitive tendering process, whilst maintaining government ownership of the rail track itself.
Almost 26 years later, passenger numbers have more than doubled, despite falling by almost a third between 1960 and 1990 under British Rail. Rail fares have also increased in a modest fashion, on average by only around 1.3% per annum in real terms since 1996, compared with around 2.2% per annum during the final 15 years of British Rail. Rail subsidies have only increased by around £600m between 1994 and 2016, despite a drastic increase following the Hatfield Crash in 2000 and a perpetual narrative otherwise. Investment has also skyrocketed nine-fold since privatisation, from £698m in 1994-1995 to £6.84bn in 2013-2014, explaining the surge in rail quality, usage and safety.
Affordability and use of rail services are not the only visible improvements of privatisation, passenger welfare and safety was also a major improvement witnessed during privatisation. According to research by Imperial College London (ICL) in 2007, between 1994 and 2007, had British Rail continued to operate rail services throughout Britain, there would’ve been an additional 150 deaths on UK trains, based on previously shocking health and safety trends.
While the franchise system is far from perfect, and needs significant improvement given soaring costs for various peak-ticket types in recent years, the solution is certainly not in the past. The previous attempt at nationalisation, which saw notoriously expensive, poor quality and unsafe levels of service, should not be revisited. Instead, the solution lies in making privatisation more private, and much less corporatist.
Contract tendering needs to become much more competitive, ending the 7-year minimum contract for TOCs (Train Operating Companies), allowing much more competition and market accountability for poor quality operators. Rail building restrictions, regulations and public ownership of the track system should also be revisited, as the franchise system in general is inherently uncompetitive.
The Labour Party will continue to suggest tried and failed authoritarian solutions to national issues, whether it be in the rail system, climate change or the economy. It is up to liberty minded people to remind those concerned with such issues that the solution lies not with government and coercion, but with the free market and a greater degree of liberty.
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